Hayek vs Deflation — Yet Again

“If I were responsible for the monetary policy of a country I would certainly try to prevent a threatening deflation, that is, an absolute decrease in the stream of incomes, by all suitable means, and would announce that I intended to do so.  This alone would probably be sufficient to prevent a degeneration of the recession into a long-lasting depression.”

F. A. Hayek, “Full Employment at any Price?”, 1975

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One Response to Hayek vs Deflation — Yet Again

  1. Jonathan says:

    Presumably the various methods one would employ to stall a decrease in the stream of incomes itself would be highly unjust and simply frustrate or stall the process that the deflation was trying to address?

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