Re:Economic Pessimism Growing in U.S.
by fennecfoxen on Tuesday May 31, 2022 @03:45PM
(#31574003)
Inflation is not generally not necessary to encourage capital to be invested. Real returns, discounted for risk, encourage capital to be invested.
Monetary stability makes many forms of investment less risky! Low real interest rates (which often co-occur with inflationary episodes) discourage many forms of savings (which banks could use to invest.) The link between inflation and overall amounts of investment is not abundantly clear in the general case and it is an open problem that remains under study.
Monetary stability makes many forms of investment less risky! Low real interest rates (which often co-occur with inflationary episodes) discourage many forms of savings (which banks could use to invest.) The link between inflation and overall amounts of investment is not abundantly clear in the general case and it is an open problem that remains under study.