The Austrian philosopher Karl Popper once stated that only critical discourse could give us the maturity to consider an idea from more and more angles and to evaluate it properly.5 And to my mind, the conditions under which the Eurosystem has been buying government bonds since 2015, for example, illustrate how this kind of debate can in fact improve our decisions.
They will respond to this demand by increasing production because they think they will be able to sell more and because their return is higher relative to the cost of production. But this is not ‘time-consistent’. When workers respond to their real loss of income (higher inflation minus last year’s wage level), they ask for higher wages and the cost of production rises.