Hayek opposed stabilizing consumer prices throughout his career because in an environment of rising productivity it requires injecting credit to keep prices from falling, distorting the interest rate; instead he proposed (in The Constitution of Liberty) stabilizing an index of wholesale/input prices so that output prices could fall relative to input prices without triggering credit injections.

normativepending

Speaker

Larry White

Evidence Quote

if there's a growth in productivity with stable input prices output prices can fall relative to input prices without triggering injections of credit

Source

Larry White on Hayek and Money 02/01/2010EconTalk
Created: 6/17/2026, 10:31:20 AM

My Notes

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