The Long-Term...

 In the long-run, all the countries are trying to increase their per capita income and living-standard according to the increase in productivity while maintaining their competitiveness with innovations because labour is relatively scarcer which might restrict the economy’s capacity absorb capital without increasing wages and the general price-level, as found in the general quantity theory of money... But, now there is also a special quantity theory of money observed in the developed countries that is not expected under the general conditions. In a major part of the developed world loose monetary policy has failed to increase prices as expected because demand might not increase due to excess of labour supply which may put a downward pressure on the wages and prices when interest rate or cost are also close to the zero lower bound. More money-supply has reduced the cost of capital with low wages increasing supply despite of low demand which has lowered the general price-level and interest rates pushing the economy at the zero lower bound or liquidity-trap for a longer period. At the zero lower bound cash hoarding increases, not necessarily in banks, because the value of money goes up in the face of lower prices, moreover everybody expects higher inflation in the future because it is the our basic observation that prices increase with time and the will to hold unlimited money also increase savings. The zero lower bound also trims the possibility of increasing investment and employment by reducing the borrowing cost or nominal interest rate, but the central banks are trying to reduce real interest rate and wages with inflation to incentivize the supply-side and profits which would also increase the relative international competitiveness to survive in the market-place. The central banks consciously or unconsciously are favouring the capitalist to reduce unemployment. Nonetheless, when real wages are going down demand too is likely to remain subdued resulting in lower growth rate...  The “long-run” to me exists all the time, which is the truth; it exists always, not subject to short-termism, what everybody does under the similar conditions. The difference between general and partial...