Editing Stagflation (section)

===Austrian School of economics===
Adherents to the [[Austrian School]] maintain that creation of new money [[ex nihilo]] benefits the creators and early recipients of the new money relative to late recipients. [[Money creation]] is not wealth creation; it merely allows early money recipients to outbid late recipients for resources, goods, and services. Since the actual producers of wealth are typically late recipients, increases in the money supply weakens wealth formation and undermines the rate of economic growth. Austrian economist Frank Shostak says: "The increase in the money supply rate of growth coupled with the slowdown in the rate of growth of goods produced is what the increase in the rate of price inflation is all about. (Note that a price is the amount of money paid for a unit of a good.) What we have here is a faster increase in price inflation and a decline in the rate of growth in the production of goods. But this is exactly what stagflation is all about, i.e., an increase in price inflation and a fall in real economic growth.  Popular opinion is that stagflation is totally made up. It seems therefore that the phenomenon of stagflation is the normal outcome of loose monetary policy. This is in agreement with Phelps and Friedman (PF). Contrary to PF, however, we maintain that stagflation is not caused by the fact that in the short run people are fooled by the central bank. Stagflation is the natural result of monetary pumping which weakens the pace of economic growth and at the same time raises the rate of increase of the prices of goods and services."<ref name="shostak">{{citation|title=Did Phelps Really Explain Stagflation?|language=en|first=Frank|last=Shostak|work=Mises Institute|date=2006-10-10|access-date=2024-11-16|url=https://mises.org/mises-daily/did-phelps-really-explain-stagflation}}</ref>{{better source needed|date=November 2024|reason=[[WP:MISES|Consensus]] is that this outlet is unreliable}}{{long quote|date=November 2024}}