Well, the word in any case. “Stable Prices are No Cure-All“ (Christopher Farrell, August 1, 2003): “For the past quarter century, central bankers have preached the virtues of price stability — the elusive, long hoped-for goal, an economic equivalent of the holy grail. Economists of all stripes — liberal, conservative, Keynesians, neo-Keynesians, monetarist, neoclassical, and Austrian, to name just a handful of the major schools — believe the economy works better if the value of money is stable.”
Nice, but not actually correct regarding the Austrian School. Mises wrote: “Exchange ratios are subject to perpetual change because the conditions which produce them are perpetually changing. The value that an individual attaches both to money and to various goods and services is the outcome of a moment’s choice. Every later instant may generate something new and bring about other considerations and valuations. Not that prices are fluctuating, but that they do not alter more quickly could fairly be deemed a problem requiring explanation. Daily experience teaches people that the exchange ratios of the market are mutable. One would assume that their ideas about prices would take full account of this fact. Nevertheless all popular notions of production and consumption, marketing and prices are more or less contaminated by a vague and contradictory notion of price rigidity. The layman is prone to consider the preservation of yesterday’s price structure both as normal and fair, and to condemn changes in the exchange ratios as a violation of the rules of nature and of justice.”
