[ExI] banks and crash

[gts]

--- On Mon, 10/13/08, Stathis Papaioannou <stathisp at gmail.com> wrote:

> Deficit spending while the central bank keeps interest
> rates unchanged has the effect of increasing the money supply.

Perhaps, but can you show me the money supply data for, say, 1939 to 1946? And can you show me a positive correlation, (statistically significant or not), between growth of the money supply and growth of GDP for the same period?

I would like to believe that money supply explains the dramatic increase in GDP during the war, but I've looked around and so far I haven't found the evidence. 

Thanks Stathis,

-gts