What they all have in common is that the disturbing factors act through changes of the price level. It is through changes of the price level that expansion and contraction of credit and money act upon the economic system, and they all believe that stability of the price level is the sufficient criterion of a rational regulation of credit. If it were possible to keep the price level stable, prosperity would never be followed by depression. If the price level is allowed to rise and the inevitable reaction to come, it would be possible to end the depression and to restore equilibrium, if one
...more
assumption that controlling the price level and resolve any economic difficulties.
