| In the modern world its also about incentivizing/disincentivizing debt. There is no argument that cannot or does not have long-term effects, and no we would not all be incredibly rich, as it absolutely costs something to increase to money supply. When you increase the money supply you devalue each and every current piece of money in existence. Money (fiat) can be infinite but what you buy with it is not. >Every underdeveloped nation would simply increase their money supply and poverty would end for ever. No, it wouldn't. Have you heard of hyperinflation? A gallong of milk would simply cost $1000 dollars. Kind of like how milk used to cost 5 cents a gallon 50 years ago. The countries that do try what you are talking about, and there are plenty of examples, amazingly, all end up incredibly poor and economically devastated. The argument that monetary policy cannot affect the real world economy is more about its limitations, where it cannot really make up for something like a months long interruption to international trade because the world's leading manufacturing nation has quarantined half its population. The best it could to benefit the long term, I would think, is to make credit more available and cheaper to make it easier for companies and governments to weather the storm with minimal damage. |