forbes.com
Syria's rejection of monetarism: economic production drives money supply
Post-Assad Syria shows increased US dollar circulation despite previous illegality, driven by economic activity rather than central bank policy, challenging monetarist views on money supply control.
- How does the increase in US dollar circulation in Syria after Assad's fall challenge traditional monetarist views on money supply?
- Money supply" isn't controlled by central banks; it reflects economic production. In Syria, despite previous illegality, US dollars circulated due to market activity. After Assad's fall, open currency exchange emerged, increasing dollar circulation.
- What factors, besides government policy, influence the circulation of currencies in a country, and how is this demonstrated in the Syrian case?
- The case of Syria demonstrates that economic activity, not central bank policy, drives money supply. Increased dollar circulation post-Assad reflects a surge in market activity and the availability of foreign goods. This contradicts monetarist views on money supply management.
- What are the long-term implications of the observed relationship between economic production and money supply for monetary policy and economic forecasting?
- Future economic trends in Syria suggest continued growth in dollar circulation as long as market activity remains robust. Attempts by governments to artificially control money supply are likely to be ineffective and may negatively impact economic growth by limiting production.
Cognitive Concepts
Framing Bias
The narrative frames the issue by prioritizing anecdotes and examples (Syria) to support the author's argument against monetarist views. The headline (if any) and introduction would likely emphasize the rejection of monetarist ideas, potentially pre-shaping reader interpretation before presenting a balanced overview of economic principles.
Language Bias
The author uses charged language such as "murderous Syria" and terms like "invisible hand" which carries strong connotations. The repeated use of "so-called" before "money supply" is also a form of loaded language. Neutral alternatives might be to replace "murderous Syria" with "Syria under Hafez al-Assad's rule" and to omit "so-called" when discussing money supply.
Bias by Omission
The analysis omits discussion of alternative economic theories beyond monetarism, potentially presenting an incomplete picture of economic factors influencing currency circulation. It also doesn't address potential downsides of uncontrolled currency flows, like economic instability or vulnerabilities to manipulation.
False Dichotomy
The text presents a false dichotomy between monetarist views and the author's perspective, oversimplifying the complexities of economic systems and monetary policy. It frames the issue as a simple eitheor choice, neglecting nuances and alternative approaches.
Sustainable Development Goals
The article highlights the natural relationship between economic production and money supply, arguing that increased production leads to increased circulation of trusted currencies, such as the US dollar in Syria. This is directly relevant to SDG 8 (Decent Work and Economic Growth) as it suggests that economic growth, driven by market forces and production, naturally leads to increased economic activity and potentially improved livelihoods. The example of Syria, where the circulation of the dollar increased after the fall of Assad and the liberalization of the market, strongly supports this argument. The increased economic activity associated with greater dollar circulation could create more jobs and improve economic conditions.