The Causes of Economic Fluctuations: Possibilities of Anticipation and Control

By Willford I. King | Go to book overview

CHAPTER 8
FORCES TENDING TO ACCENTUATE AND PROLONG DEPRESSIONSS

The Nature of the Forces . -- The fact was brought out in the preceding chapter that some downward movements of business are relatively short, while others extend over long periods of time. It was also explained that, as long as the system of free competition prevails, strong forces always exist which tend to eliminate maladjustments of any kind and to restore equilibrium. Clearly, in the case of prolonged business declines, the forces just mentioned are overpowered by other forces. Just what these forces are, and how they act, is as yet but partially understood. It is, however, reasonably clear that certain forces, when present, tend to make depressions worse, prolonging them and preventing the advent of recovery. We shall now proceed to consider some of the forces which have such untoward results.

Pressure to Liquidate Debts . -- An influence in this direction, which is probably as potent as any, is the existence of the continued pressure to liquidate debts. As long as debtors feel themselves to be under duress, most of them undoubtedly refrain from purchasing their usual quotas of goods. It may be argued that, when money, or bank credit, is transferred from the debtor to the creditor, the latter expands his volume of buying, and that, therefore, the total volume of purchases is in no sense diminished. When creditors are individuals, there is, undoubtedly, a certain amount of truth in this contention. When, however, creditors are not private individuals but bankers, the collection of money from a debtor does not usually encourage new buying of goods, but merely reduces the total volume of deposits in banks -- in other words, this actually diminishes the deposit currency of the nation.

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The Causes of Economic Fluctuations: Possibilities of Anticipation and Control
Table of contents

Table of contents

  • Title Page i
  • Preface v
  • Contents vii
  • Charts xiii
  • Chapter 1 - INTRODUCTION 3
  • References 18
  • Chapter 2 - CHARACTERISTICS OF BUSINESS DEPRESSIONS 20
  • References 47
  • Chapter 3 - RECORD OF BUSINESS DEPRESSIONS IN THE UNITED STATES 49
  • References 72
  • Chapter 4 - MISLEADING EXPLANATIONS OF THE ORIGINS OF DEPRESSIONS 74
  • References 107
  • Chapter 5 - INADEQUATE EXPLANATIONS OF THE ORIGINS OF DEPRESSIONS 109
  • References 124
  • Chapter 6 - THE DEPRESSION CULTURE-MEDIUM 125
  • REFFRENCES 134
  • Chapter 7 - THE DEPRESSION'S ORIGIN 138
  • References 168
  • Chapter 8 - FORCES TENDING TO ACCENTUATE AND PROLONG DEPRESSIONSS 169
  • References 194
  • Chapter 9 - INEFFECTIVE WAYS OF COMBATING DEPRESSION 196
  • References 207
  • Chapter 10 - FORCES COMMONLY TENDING TO END DEPRESSION 209
  • References 222
  • Chapter 11 - CYCLES 223
  • References 244
  • Chapter 12 - THE POSSIBILITY OF FORECASTING BUSINESS FLUCTUATIONS 247
  • References 263
  • Chapter 13 - SOCIAL COST OF UNSTABLE PRODUCTION 266
  • References 279
  • Chapter 14 - WAYS TO MINIMIZE DEPRESSION 282
  • References 311
  • Chapter 15 - WAYS TO MINIMIZE DEPRESSION (CONTINUED) 313
  • References 337
  • Index 339
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