Can Money Supply Growth Cause Economic Growth?

Most economic commentators say central bank should provide support to economy by means of large increases in money supply.

Frank Shostak: Inflation regresses economic growth by undermining previous growth.

He says money printing, without an increase in produced goods, only artificially increases demand for existing goods.

In a free market economy, consumption and production must precede consumption.

The collapse in the sources of artificial economic growth exposes commercial banks’ fractional reserve lending and raises the risk of a run on banks.

To protect themselves, banks curtail the inflationary generation of credit.

Neither the central bank nor the government have the resources to grow the economy, writes Frank Shostak .