AUTHOR’S PREFACE

CHAPTER 1

INTRODUCTORY

CHANGES in the general level of prices have always excited great interest. Obscure in origin, they exert a profound and far-reaching influence on the whole economic and social life of a country.

CHAPTER 2

PURCHASING POWER OF MONEY AND AVERAGE PRICES

CHAPTER 3

RELATIVE PRICES AND MONEY PRICES

MODERN investigations in the field of the theory of value have thrown much light on the origin and determination of the exchange values, or relative prices, of commodities. But they have, unfortunately, done nothing to promote directly the theory of money—of the value of money and money prices.

CHAPTER 4

THE SO-CALLED COST OF PRODUCTION THEORY OF MONEY

CHAPTER 5

THE QUANTITY THEORY AND ITS OPPONENTS

CHAPTER 6

THE VELOCITY OF CIRCULATION OF MONEY

A. A Pure Cash Economy

CHAPTER 7

THE RATE OF INTEREST AS REGULATOR OF COMMODITY PRICES

A. The Classical Theory and the School of Tooke

CHAPTER 8

THE NATURAL RATE OF INTEREST ON CAPITAL AND THE RATE OF INTEREST ON LOANS

THERE is a certain rate of interest on loans which is neutral in respect to commodity prices, and tends neither to raise nor to lower them. This is necessarily the same as the rate of interest which would be determined by supply and demand if no use were made of money and all lending were effected in the form of real capital goods. It comes to much the same thing to describe it as the current value of the natural rate of interest on capital.

CHAPTER 9

SYSTEMATIC EXPOSITION OF THE THEORY

A. The Causes which Determine the Natural Rate of Interest on Capital

It is to the brilliant work of Jevons and Böhm-Bawerk that we mainly owe the enormous advance which has recently taken place in our knowledge of the nature of interest and of the part played in production by capital. Though they differ somewhat in formal outlook, the substance of these two writers’ contributions is very nearly identical.