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Sven's avatar

You have a balanced approach. It is good. Prices are actually highly dependent on amount of savings and the level of competition. I recommend you this book that explains how real prices are formed and evolve over time. It is unique in terms of connecting the monetary system to the real prices that are formed in the market. https://www.academia.edu/50822011/The_Theory_of_Capitalism https://www.amazon.com/dp/B093RWX8FX

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Matt Hill's avatar

I don't understand how increased access to loans moves the supply curve back, isn't that an income shock to buyers, thereby moving the demand curve out?

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Brian Albrecht's avatar

It's maybe not a great example. What I had in mind is that if government is footing the bill, there is less price competition and therefore costs can rise through waste.

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