In economics, the concept of monetary policy is discussed as a basis for counter balancing GDP fluctuations above and below potential GDP. This has been shown to at least partly work after the 2008 crisis, however, the side effect (perhaps purposeful) was that the quantitative easing directly benefitted banks and the wealthy (wealthy being owners of financial assets), while those living paycheck to paycheck have suffered (no real wage growth, slow jobs growth, increasing education costs, increasing healthcare costs, increasing food costs).
With that said, in a theoretical bitcoin world economy, this inequality would be removed, but the ability to 'counter punch' economic swings by increasing/decreasing the money supply would no longer be an option. Central banks would have a harder time controlling interest rates as well because they wouldn't control the interbank lending rates (assuming banks wouldn't exist as they do today, because people wouldn't need their deposit services).
I guess the flip side is that banks caused the crisis in the first place, but the topic I'd like discussion on is pros/cons to a capped money supply system, from an economic standpoint. I know this is an theoretically complex topic, but any economics Ph.D.'s out there, now's your time to shine on the forum!
Topic: The Economics of Capped Supply (Read 87 times)
Jump to: