Re: investment and unemployment

["Harry Veeder" <veed0001@xxxxxxxxxxxxxxxx>]

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>From: Warren Mosler <mosler@xxxxxxxx>
>To: POST-KEYNESIAN THOUGHT <pkt@xxxxxxxxxxxxxxxx>
>Subject: Re: investment and unemployment
>Date: Mon, Apr 3, 2000, 4:11 pm
>

>>
>
>>
>>
>> snip:
>> >Deflation has been the norm in peacetime throughout most economic >history
>> for the obvious reason that men and women are always improving >their
>> production skills. A three hundred year graph of inflation shows >that the
>> saecular trend of deflation of prices accelerated after 1801, >and only
>> turned to inflation when the use of high interest rates to >control
>> inflation was introduced. In Britain the graph changes >direction sharply
>> after November 1951 when the first rise in Bank Rate >for 20 years took
>> place. Interest rate policy subsequently ensured the >relentless rise in
>> inflation.
>
>There was usually some kind of 'gold standard' for those 300 years?
>The deflation observed was therefore a drop in the relative value of gold?
>
>

This is not accurate.
Just because there was some sort of "official" standard does not mean people

in practice valued every transaction in terms of gold.  Such standards
shape policy for special interests as well as simplifying and distorting the
complex
social reality of valuation that goes on between buyers and sellers in
the marketplace.

Harry Veeder