Hey, that means you, Krugman. Unplug the ipod, Tyler. Stop the yap, yap, yap, Delong.
OK. Question.
Why are housing prices falling, along with almost every other price associated with housing, from building industry to the mortgage and finance industry?
Hayek:
The decisive fact .. is that the effect on prices of these changes in quantities brought about by monetary influences will be in exactly the opposite direction from the direct effect on prices of these same monetary change. We may suppose, for instance, that, at the point where a net addition to the total money stream makes its first impact on the commodity markets, there will result an increase first of the prices and then the output of the commodities affected The effect of this increase in output will be that, as soon as the addition to the money stream cease, the prices of these commodities will fall relatively to the prices of all other commodities and will reach a lower level than prevailed before the monetary change.
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