The Purchasing Power of Money: Its Determination and Relation to Credit (Classic Reprint)

Thb purpose of thia book is to set forth the principles determining the purchasing power of money and to applj those principles to the study of historical changes in that purchasing power, including in particular the recent change in the cost of living which has aroused world-wide discussion. If the principles here advocated are correct, the purchasing power of money or its reciprocal, the level of prices depends exclusively on five definite factors: (1) the volume of money in circulation; (2) its velocity of circulation; (3) the volume of bank deposits subject to check; (4) its velocity; and (5) the volume of trade. Each of these five magnitudes is extremely definite, and their relation to the purchasing power of money is definitely expressed by an equation of exchange. In my opinion, the branch of economics which treats of these five regulators of purchasing power ought to be recognized and ultimately will be recognized as an exact science, capable of precise formulation, demonstration, and statistical verification. The main contentions of this book are at bottom simply a restatement and amplification of the old quantity theory of money. With certain corrections in the usual statements of that theory, it may still be called fundamentally sound. What has long been needed is a candid reexamination and revision of that venerable theory rather than its repudiation.
(Typographical errors above are due to OCR software and don't occur in the book.)

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Forgotten Books is a publisher of historical writings, such as: Philosophy, Classics, Science, Religion, History, Folklore and Mythology.

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