Thursday, September 3, 2009

Credit Cards Cause Inflation

John Geanakoplos and Pradeep Dubey argue in their June 2009, research paper, "CREDIT CARDS AND INFLATION" that the issuance and use of credit cards causes inflation by increasing the velocity of money.
The introduction and widespread use of credit cards increases trading efficiency but, by also increasing the velocity of money, it causes inflation, in the absence of monetary intervention.
Read their complete paper available for free download here.

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