Read e-book online Prices and production PDF

By Hayek F.A.

ISBN-10: 1933550228

ISBN-13: 9781933550220

This ebook owes its life to a call for participation through the collage of London to carry through the consultation 1930-31 4 lectures to complex scholars in economics, and within the shape within which it was once first released it actually reproduced those lectures.

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104-6). Whether the American author whose views on these problems comes nearest to those expressed in the present book, Mr. M. W. Watkins, whose exceedingly interesting article on " Commercial Banking and the Formation of Capital" (Journal of Political Economy, vol. , 1919), I have only recently become acquainted with, is indebted to the same source I do not know. In England similar ideas seem to have been developed independently, first by Professor Pigou (in Is Unemployment Inevitable ? r 925.

Where the intermediate products become consumers' goods. This relationship is essentially the same as that between the total quantity of water in a stream and the rate at which this water passes the mouth of this stream. (This simile seems to be more appropriate than the more familiar one which considers capital as a " stock " and only income as a " flow ". Cf. on this point N. J. Polak, Grundziige der Finanzierung, Berlin, 1926, p. ) It is convenient to treat the quantity of intermediate products at any point of this stream as a function of time f(t) and accordingly the total quantity of intermediate products in the stream, as an integral of this function over a period r equal to the total length of the process of production.

1 At the same time, it is no less clear that, in order that the price level may remain unchanged, the amount of money in circulation must change as the volume of production increases or decreases. The banks could either keep the demand for real capital within the limits set by the supply of savings, or keep the price level steady; but they cannot perform both functions at once. , a stationary society, to keep the money rate of interest at the level of the equilibrium rate would mean that in times of expansion of production the price level would fall.

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Prices and production by Hayek F.A.


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