Popular Delusions

This page contains a list of popular economic fallacies and myths that have been covered at length by past articles on this site. It provides a summary of some of the most widespread and dangerous errors in economics while referencing supporting material which explores these pervasive myths in much greater detail.

The fallacies below serve to categorize past articles based on the specific economic myths they are meant to address. It serves as a quick reference guide, bringing together the various arguments and rebuttals to popular economic misconceptions under one central location for the reader’s convenience. The myths are listed in no particular order, with each new myth being added to the existing list simply in the sequence they become relevant and consequential.

What follows, then, is a living document of sorts, to be updated periodically as new fallacies are added over time and explored in greater depth by supporting articles on this site.

Fallacy #1: Printing money is harmful because it raises prices and decreases our standard of living

References:
Inflation, the Disease of Money

Fallacy #2 – Gold should be bought as a hedge against deflation

References:
Debunking Gold

Fallacy #3 – Quantitative Easing (QE) isn’t printing money, it’s simply swapping assets

References:
Is QE Inflationary?

Fallacy #4 – Quantitative Easing (QE) in the US doesn’t create money, it just creates bank reserves

References:
How the Fed “Prints” Money

Fallacy #5 – Inflation is caused by the expansion of credit

References:
Liquidity and the Mirage of Credit

Fallacy #6 – You can use different metrics to measure the money supply

References:
Follow the Money (Supply)
Measuring Money
What’s Money, What’s Not?

Fallacy #7 – The CPI can be used as an indicator of the general rise in prices throughout the economy

References:
Inflation, Lies, and Statistics

Fallacy #8 – The Bank of Canada performed Quantitative Easing (QE) during the 2008 Great Financial Crisis

References:
The Great Canadian QE Myth – Part 1
The Great Canadian QE Myth – Part 2

Fallacy #9 – Quantitative Easing (QE) is inherently inflationary

References:
The Great Canadian QE Myth – Part 3

Fallacy #10 – Consumption is the engine of economic growth

References:
A Crusoe Economy

Fallacy #11 – QE in Japan is “printing” money

References:
Money-Pumping Myths, Japan Edition

Fallacy #12 – Interest rates represent the “price” of money

References:
The Price of Money