A small yet powerful thought on inflation

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DT-waw

Imagine cars being build with engines 50% more fuel efficient.
or drivers replacing their cars to vehicles 50% less fuel consuming.


The price of oil and taxes combined would have to rise 100% , yes 100% to keep the amount of money in circulation on the same level!
 
Quote from DT-waw:
----Imagine drivers replacing their cars with vehicles 50% less fuel consuming.
More...
It's okay as long as you never get into an accident with a "fuel consuming" SUV. :(
 
What in the world are you talking about? How does this make any sense? The drop in price of oil (assuming that's the consequence of your scenario) is made up by both short term production of these new engines and the extra growth spurred by lower input costs, and in the long term by increased technological innovation.

Why does every 'theorist' on ET always end up with the broken window fallacy?

Quote from DT-waw:

Imagine cars being build with engines 50% more fuel efficient.
or drivers replacing their cars to vehicles 50% less fuel consuming.


The price of oil and taxes combined would have to rise 100% , yes 100% to keep the amount of money in circulation on the same level!
More...
 
Quote from sjfan:

What in the world are you talking about? How does this make any sense? The drop in price of oil (assuming that's the consequence of your scenario) is made up by both short term production of these new engines and the extra growth spurred by lower input costs, and in the long term by increased technological innovation.

Why does every 'theorist' on ET always end up with the broken window fallacy?
More...

Stop making sense.
 
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