jondwhite wrote:Am I correct
jondwhite wrote:
Am I correct in thinking the limit of central banks creating money after which the currency devalues is the national growth rate of the economy?
More or less, at least in the short run. The currency shouldn’t devalue if the rate at which it is increased is not more than the rate of increase in economic transactions for which it is used.
jondwhite wrote:
As long as the economy is growing, central banks can issue more currency?
Central banks can of course issue more currency whenever they want, but if the economy is growing they can (and probably should) safely issue more (within limits).But the official government policy in most countries these days is not to maintain a stable price level and currency value (the same thing from a different angle) but to achieve a slowly increasing price level by means of a slowly depreciating currency of about 2 percent a year.