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by ben_w
1949 days ago
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That’s not the only way it’s avoided by fiat currencies. Physical units wear out and are lost (sometimes destroyed deliberately before that point, I don’t know how often); and the banks have rules on the use of fractional reserve banking and similar, which is for practical purposes a time-limited money multiplier, and the multiple of that multiplier depends on the rules: https://en.m.wikipedia.org/wiki/Money_supply Fiat can, most of the time, grow or shrink the money supply as needed for the most stable economic outcome. |
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