Some nice macroeconomics from Chris Dillow (who also points out that Reg Varney was the first person in the world to use an ATM):
However, the invention of the ATM helped make it much easier to get cash out of the bank. This fall in shoe leather costs for technological reasons offset part of the normal cost of inflation, which helped make people less intolerant of it.
Is it really a coincidence that inflation began to rise as the cash point machine, as popularized by Mr Varney, became more widely used? I think not.
Emphasis mine. The question that I'm puzzled by at the moment is this: How does financial innovation that regulators do not understand affect the demand for money (through V)? I am open to more sophisticated explanations for the credit crunch than "loose monetary policy", but how does private sector credit creation impact the culpability of central bankers?
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