By Benjamin M. Anderson
Benjamin Anderson, American Austrian, used to be between a handful of economists, led by way of Ludwig von Mises in his pioneering paintings The concept of cash and Credit in 1912, who got down to combine financial idea right into a common concept of value.
Anderson dedicated a big section of his nice ebook The price of Money, released in 1917, to a refutation of the "mechanical" volume thought of money.
He argued that the factors and results from which the knowledge of the amount equation are developed are disaggregated and complicated; regardless of the correlation among the combination variables of the amount equation, correlation isn't really causation; causation can't be tested within the equation simply because there are not any quantitative constants in human motion (in specific, speed isn't constant); the amount thought ignores time; there's no unambiguous strategy to outline the variables within the thought: the cash inventory, speed, the volume of products, and the fee level.
Anderson extra holds that no matter what actual propositions the volume thought bargains can to boot be deduced from an accurate conception of worth and that many actual theories of recent economics (such because the legislation of call for and provide, the idea of capitalization, and Gresham’s legislation) are inconsistent with it.
Although a few actual propositions could be had from the amount idea, now not each end derived from it really is precise. Anderson expended a lot attempt to illustrate that many theories developed upon it are fake.
For instance, he argued that the independence among the inventory of cash and the amount of products, assumed for the aim of achieving the realization that raises within the inventory of cash result in proportional raises within the expense point, if carried into macroeconomics has pernicious results.