Franco Guevara



Articles by Franco Guevara

The Current US Economic Situation from an Austrian Viewpoint

This article is a brief analysis of the US economic situation from the point of view of the Austrian School of Economics. It is strictly macroeconomic: a deductive hypothesis of what is happening in the aggregates.
Let us place ourselves in the months immediately after the arrival of covid-19, the first quarter of 2020. As an economic policy measure, the US government decided to increase the money supply. Through different mechanisms, they put an unprecedented amount of money into the economy. This caused three important effects.
First, as the supply rises, ceteris paribus, the price falls. In the money market, price is the purchasing power of money (i.e., the number of basic baskets that one monetary unit allows one to buy). As the money supply rises, people get rid of the excess by

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