IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-1-349-12943-0_4.html
   My bibliography  Save this book chapter

Money and Prices

In: The Structure of a Modern Economy

Author

Listed:
  • Kenneth E. Boulding

    (University of Colorado)

Abstract

A very important property of any economy over time is the degree to which it has experienced inflation or deflation of prices, including money wages. Any monetary unit like the dollar is subject to fluctuations in its general purchasing power because of changes in money prices. We try to measure these fluctuations by constructing a price level index or a price deflator (or inflator), of which there are many varieties. There is some dispute among economists that has never quite been resolved as to what the ideal price index should be. One index is calculated by estimating how much money it would take to buy a ‘market basket’ of relevant commodities, corresponding more or less to the relative quantities that are produced or consumed. Other measures have been proposed, but this seems to be the simplest and perhaps the most meaningful. A difficulty arises, however, when deciding which market basket is significant when the relative quantities of commodities actually purchased change over time. The price level index will be different if we take the market basket at the beginning or at the end of the period. When there is a change in the quality of commodities, and when new commodities appear, the task of defining a price level in an exact form becomes virtually impossible and we have to be content with rough measures (Chapter 1).

Suggested Citation

  • Kenneth E. Boulding, 1993. "Money and Prices," Palgrave Macmillan Books, in: The Structure of a Modern Economy, chapter 4, pages 40-52, Palgrave Macmillan.
  • Handle: RePEc:pal:palchp:978-1-349-12943-0_4
    DOI: 10.1007/978-1-349-12943-0_4
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-1-349-12943-0_4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.