economic question!

[breadisfunny]

what would happen to the economy if the mint stopped minting money for 1 year? would it be deflation? i am curious. of course ill probably just get a bunch of "just google it" responses. or it will just get ignored either way works fine.

[Celista]

Yes, deflation.

The fed controls the money supply in other ways. See here: http://www.colorado.edu/economics/co...on11-main.html

[KOMO1211]

less money=higher interest on money banks take from the reserve. this equals contraction or a stagnation effect. which does lower inflation but you can not ever get rid of inflation all together. crash course has a nice series on many topics under econ.

[breadisfunny]

would this hold true for a 1 year money printing freeze?

[Gamdwelf]

Bread is back! The longer they do it the more effect it would have.

But why would the fed stop using what power they have.

[Thepersona]

many things. many bad things.
first. deflation. thats a big no no, mostly because it affects the economy (deflation usually means a shrinking economy)
also, a bigger velocity of the money (how much money keep changing hands) this would alter the keynesian multiplicator.
and also, you would crush the government capacity to control monetary policies, and to expand the monetary base for any sudden increase of spending.
other thing that can happen is that without the printing (or in reality, creating) of dollars, the bond market would go to the ground. US would be unable to sell new government bonds, to pay the maturing ones, etc.

[THE Bigzoman]

what would happen to the economy if the mint stopped minting money for 1 year? would it be deflation? i am curious. of course ill probably just get a bunch of "just google it" responses. or it will just get ignored either way works fine.

Probably deflation unless money changed hands a fuckton more frequently to pick up the slack.

The fed controls the money supply via buying and selling financial assets in the international market.

[Forogil]

The effect would be more damaged and dirtier dollars in your hands. As the overwhelming majority of new dollar bills are just replacements for the existing ones.

It would not cause that much of deflation (obviously except for M0), since people would likely switch to using more cheques, and other variants; and there should be some slack to handle that.