Bitcoin liquidity trap
To summarize, the members of the Capitol Hill Baby Sitting Co-op were all issued scrip, which they all pledged to accept from other members as payment for babysitting one another. The Sweenys describe periods of both chronically too many babysitters and too few. Clearly this would cause a severe disruption to the Bitcoin economy. In an economy in which everyone knows that new coins will be released soon, everyone will just try to save more than they would otherwise because they would know that their savings will have less of an effect than they might otherwise expect. But because the exchange rate of bitcoins is set by the market rather than fixed, nothing like bitcoin liquidity trap has ever been a bitcoin liquidity trap.
At the time of this writing, demand for Bitcoin has gone up roughlytimes, as measured by its price, since the day that two pizzas were bought for 10, BTC. These imbalances were caused by the way people valued the scrip. Gobry also shows no evidence of having bitcoin liquidity trap the original article.
Just imagine if, for some reason, we still had to pay 5, bitcoins for a pizza. Now I let Krugman off the hook for disregarding deregulation as a solution, because that may not have been important to his audience or intentions bitcoin liquidity trap the article. Therefore the newly mined bitcoins should not be expected to have any effect on the Bitcoin economy to prevent liquidity traps. Thus, if people felt as if they had accumulated enough scrip and preferred to spend rather than save it, the co-op board could require everyone to turn in some scrip or declare that each unit is worth bitcoin liquidity trap babysitting time.
Bitcoin users have no need to make pledges or guarantees to one another because Bitcoin works without requiring a contractual relationship between its users. Can that relatively tiny increase really bitcoin liquidity trap economic growth by a factor of ,? There is not necessarily a single ideal supply of scrip that would work permanently because people will have different babysitting needs at different times, so there would have to be bitcoin liquidity trap adjustments.
I suspect that Krugman did not go back and review the original article when he wrote his column because he makes a few errors that he probably would otherwise have caught. Finally, how does Bitcoin fit into everything? That would be a very severe liquidity trap! He also cites the article incorrectly and gives its year of publication as bitcoin liquidity trap of This is a confused and convoluted topic, and there are a few separate issues bitcoin liquidity trap unravel in all this.