[A-List] RE: Sabri's questions

[Sabri Oncu]

Henry:

> Whether an economy grows or declines depends on many 
> factors, monetary policy is only one factor.

True. As some Turkish members of this list know, I keep saying the same
elsewhere.

However, what I had in mind was the creation of money to increase the
incomes of the citizens so that they can consume more, meaning they can eat
well, have decent housing, send their kids to school, take vacations every
once in a while and the like. If this is the motivation behind money
creation, it will inevitably lead to increased demand for many goods and
services. Like, for example, there might not be enough meat since those
school teachers who previously did not have enough income to buy meat now
can buy meat. But unless the supply of meat is also increased, wouldn't the
price of meat take off? 

Hence, my question about the limits to the amount of money the government
can create.

Therefore, you and I are in agreement. It is not sufficient to create money
to feed people. You need to do "other things" too.

On another note, are you suggesting that there should be no international
trade or am I misreading you? 

Like, I like Chinese noodles, French wine, even Cuban cigars every now and
then, and the like.

Sabri