Money, Debt and Economic Activity

Money, Debt and Economic Activity

Money, Debt and Economic Activity

Money, Debt and Economic Activity

Excerpt

Money, Employment, and Prices. Is it healthy to be interested in the study of money? People think of the subject as a desert of technicalities; a part of economics where we never talk about human beings; a study of empty symbols when we might be studying underlying realities. Is there any reason beyond force of habit for keeping money on the active list of economic problems?

The answer is another set of questions: Do you care whether we have "full employment" or whether workers are forced to stand idle? Do you care whether the buying power of your dollars is eaten away by rising price levels? Do you care whether public policies toward employment and price levels are practical and effective? Do you care whether those policies require detailed government supervision of a wide range of private decisions, or whether government influence can be kept fairly limited and impersonal?

If you care about these questions, you need to study money. Explanations of unemployment and of price gyrations are largely monetary. The most promising remedies proposed are "monetary-fiscal" measures.

Since the importance of money grows out of policy issues, this book is policy-oriented. That is, relevance to policy issues is the test of what belongs in the book and guides the study of institutions and theories. By "policy-oriented" I do not mean that this book aims to sell a specific line of policy measures. (I have some policy preferences which I do not try to hide; but whether you agree or disagree need not affect the usefulness of the book.) Economists are often accused of "knowing all the answers." This is something to beware of, especially at the start of a study. But it is the business of the student of economics to come to know the questions. If he succeeds in this, he can contribute to the social process of finding answers.

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