From article: Old Fallacies Die Hard: Economic Growth Does Not Cause Inflation. Norbert Michael, Cato. June 9, 2022.
In the wonky world of economic policy analysis old fallacies seldom die.
Consider the following passage in this week’s Morning Money, discussing the failure of the Fed’s flexible average inflation targeting (FAIT) framework:
“The FAIT policy was designed for an economy that doesn’t resemble the pandemic era world—one in which inflation increased based on healthy economic factors, including PLENTIFUL JOBS, BOLSTERED BY ECONOMIC GROWTH, THAT PUSHES UP WAGES AS WELL AS PRICES.”
…
Whatever the merits of FAIT, the idea healthy economic growth causes inflation is as barmy [crazy] as it is enduring.
My colleague George Selgin has been trying to put this delusion to rest for decades.
In his 1997 book Less Than Zero he explains the more output an economy generates, the cheaper things tend to get, other things equal.
In other words, IF INFLATION IS MORE MONEY CHASING FEWER GOODS, HEALTHY ECONOMIC GROWTH IS MORE GOODS CHASING THE SAME AMOUNT OF MONEY.
…
What’s more, Selgin shows THE SORT OF DEFLATION HEALTHY ECONOMIC GROWTH CAUSES CAN ITSELF BE PERFECTLY HEALTHY.
Unlike deflation caused by a lack of demand, it doesn’t mean that anyone has to earn less.
It just means the money they earn buys more stuff.
The healthy economy causes inflation mistaken view constantly pushes the debate over optimal monetary policy in the wrong direction, leaving all sides without a clear path toward better policy.
…
Let’s hope it won’t take another 20‐plus years to get members of Congress to admit price stability should not be the Fed’s mandate.
Given our fiat money system, IT WOULD BE FAR BETTER TO REQUIRE THE FED TO TARGET STABLE TOTAL NOMINAL SPENDING, thus allowing the price level to fluctuate as appropriate, based on the broader economic circumstances.
We’d still need many other financial reforms to get the most out of economic freedom, but this shift would likely make those easier to implement.
(end of article)
… …
“The sort of deflation healthy economic growth causes can itself be perfectly healthy.”
Healthy economic growth is tragic and a nightmare to Dems.
Democrat / socialist economists' (Marx was an “economist”) nonsense made sense: Dems understand free market economics but don’t like tHAT.
As with declared-communists dem demi-communists need us All to be more equally poor and under government (zeir) command and control.

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