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