A small yet powerful thought on inflation

Discussion in 'Economics' started by DT-waw, Apr 27, 2011.

  1. 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!
     
  2. Europe beat you to it.
     
  3. It's okay as long as you never get into an accident with a "fuel consuming" SUV. :(
     
  4. sjfan

    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?

     
  5. Stop making sense.