Journal of Political Economy Vol. 17 No. 5 1909
Gold and Prices, 1890-1907
Abstract
The influence of the large production of gold upon the level of prices in the last decade presents one of the most interesting problems in theoretical as well as in practical economics. Since Ricardo, and even before him, the familiar theory has been held that an increase of the circulating medium necessarily produces an increase in the prices of goods. Yet, in the United States, we have had falling prices with an increasing circulation. Indeed, the old theory of Ricardo and Hume no longer holds undisputed sway. There seems to be general agreement hat the price of an article, like wheat, is the quantity of the given standard for which it will exchange. Obviously, price is an expression of the exchange-ratio between a commmodity, likewheat, and a standard, like gold. Hence, in these later days, it has been seen that this ratio can be changed by forces affe;cting either term of the ratio. While the causes influencing the supply and demand of gold are supposed constant, we know that causes touching the demand and supply of wheat can modify its gold price. A scanty harvest and a reduced supply of wheat, or a new demand, will raise its price; while reduced freights, improved processes, an increase of supply, or a diminished emand, will lower its price. These facts, touching wheat alone, are self-evident; and they show that changes in price are not to be attributed solely to forces affecting
- DOI
- 10.1086/251543
- Volume
- 17
- Issue
- 5
- Pages
- 257-271
- Language
- en
- Sources
- semanticscholar openalex crossref