General level of money prices

Monday, May 23, 2011

This neglected area of problems is concerned with the network of interrelationships between certain macro-economic variables such as the general level of money prices, the rate of interest, the rate of tax, the level of government expenditures, the budget deficit or surplus, and so on. An analysis of these interrelationships leads to proposals for a number of economic and financial control policies as being necessary to maintain Full Employment without an excessive inflation or an unacceptably unequal distribution of income and wealth. This analysis is based on a very greatly simplified and rather mechanical macro-economic model which pays little attention to a number of important issues concerning expectations, incentives and administrative difficulties.