ISSN:
1467-6435
Quelle:
Blackwell Publishing Journal Backfiles 1879-2005
Thema:
Sociologie
,
Wirtschaftswissenschaften
Notizen:
Measurement of the supply and demand relationship, as a technique for studying the prime causes of business cycles. The student of economic instability encounters a double problem: How to enable the businessman to maximize his profit? And, how to insure that profit maximization tends to synchronize supply and demand? This second phase of the problem has scarcely been studied, and could not be resolved with presently available means of observation. Hence, the need for a method to measure the supply and demand relationship.A distinction should be established between two kinds of supply and demand equality: apparent equality, produced by price movements—and real, underlying equality, presumed to result from price movements but much more difficult to verify. This discussion is confined to the real relationship.No one has yet established for certain whether the concept of real equality has any meaning whatever. It needs to be defined. This is the proposed definition: The supply really equals the demand only when the price at which goods sell equals their economic value. That definition is predicated upon the existence of a standard of the economic value of goods. But even economic value has not yet been endowed with a usable definition. It must be defined in terms of production costs uninfluenced by competition on the various markets. This necessitates the assumption of a hypothetical economy. The definition reads: The standard of the economic value of goods is the price at which these goods would tend to sell if they, as well as all other goods, were produced and marketed exclusively to order. By introducing the standard of economic value into the earlier definition of supply and demand equality, one arrives at the formula: The supply really equals the demand only when goods sell at the price at which they would tend to sell if they, as well as all other goods, were produced and marketed exclusively to order.The hypothetical nature of the yardstick proposed here forbids direct measurement of the real supply and demand relationship. Some indirect measurements are not, however, beyond our reach. But, more important than the concrete measurement of any particular real relationship is the abstract measurement whereby the new concept of real equality can be defined in mathematical terms. That definition is both necessary and sufficient to establish the link between prime factors causing business cycles.
Materialart:
Digitale Medien
URL:
http://dx.doi.org/10.1111/j.1467-6435.1955.tb01341.x
Permalink