Economist Robert? Murphy: bitcoin deflation is not a problem
Economist Robert? Murphy (Robert Murphy) recently attended held in Austria, Texas Bitcoin The meeting, Murphy at the meeting revealed some that some economists often used bitcoin. Murphy belongs to the Austria school, so he bitcoin interest is also reasonable. He Table with “Mises’s monetary evolution theory, and explain the 10 minute bitcoin economy” as the title of the speech. In his speech, Murphy explains why Austria economists will bitcoin interest.
Prices will not lead to the economic downturn
The first argument is the mysterious Murphy to expose deflation. As everyone knows, bitcoin is essentially a kind of currency deflation, the upper limit of 21 million, the current inflation rate is about 9%, but when it reaches the upper limit will become deflation. Most economists, such as Paul Krugman (Paul Krugman? ), found that deflation is a terrible thing, which is why they do not recognize bitcoin as a currency. In this regard, Murphy retorted: “historically, the deflation fears part from the people of bad events happened in the history of fear. For example, in 1930s during the great depression, currency prices fell. There are other times when the economic situation is not good, currency price will fall. But I think the causal relationship is not so.
In fact, partly owing to concerns. When you are scared, what would you do? You certainly don’t want to go to the investment company or something, but eager to embrace the liquidity, the money in his hands. This is why you often see people in times of panic will lose money, so you will see all the other things and money linked prices are falling. But it cannot be said to be falling prices caused by the economic downturn.”
Prices and prosperity
Murphy then pointed out that historically there have been consumer prices fell and the economy is still prosperous period. Here, Murphy cited the most often cited examples of the Austria school, which is historically known as the “long depression” period. In the “long depression” period although the price decline, but other economic activities like Almost all moving in the right direction. Marston (A.E. A.E. Musson) in his book “the great depression, from 1873 to 1896: a reconsideration”, describes the phenomenon: “the price is falling, but the other index of economic activities, such as coal, pig iron output shipbuilding tonnage, raw wool and cotton consumption, import and export data, shipping entry and customs declaration, customs clearance, freight joint-stock company formation, trading profits, wheat, meat, tea, beer and tobacco consumption and so on, all of these are on the rise.”
Of course, in consideration of bitcoin as a currency, deflation is not conducive to the net regardless of the economy as a whole, are not important. If a currency is a currency deflation, and the other is inflation, which one will be the general public? Obviously, people will choose which with the passage of time, the value of rising Currency. Even though many economists say the essence of deflation bitcoin is not good, but it does not completely prevent people choose bitcoin.