00:01
So here we're given the accurate proposition that money does not seem to cause growth, right? countries that print a lot of money do not grow faster.
00:14
We think if printing money is stimulating the economy, but if you print a lot of money over a long period of time, it does not lead to more growth.
00:23
So one, high growth implies less money.
00:31
This is just false.
00:35
There's nothing correct about this because richer countries or faster growing countries need more money.
00:44
If your economy is growing, it needs more money because there's more transactions, there's more business happening and they need a larger monetary base to support that economic activity.
00:58
If you think of mv equal, equals py.
01:04
If your y is growing a lot, v is usually kind of fixed.
01:08
You don't want deflation.
01:10
Deflation is bad.
01:11
So what you need to do is print money to accommodate the economic growth.
01:17
Otherwise, you're likely to end up in a deflationary environment.
01:21
So this one is obviously not, right? two is the correct one.
01:27
It's the idea that money mostly causes inflation...