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Prices in Recession and Recovery: A Survey of Recent Changes

  • Economics


This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title: Prices in Recession and Recovery: A Survey of Recent Changes Volume Author/Editor: Frederick C. Mills Volume Publisher: NBER Volume ISBN: 0-87014-030-2 Volume URL: Series: General Series No. 31 Publication Date: 1936 Chapter Title: General Aspects Of Recent Price Movements Chapter Author: Frederick C. Mills Chapter URL: Chapter pages in book: (p. 3 - 38) CHAPTER I GENERAL ASPECTS OF RECENT PRICE MOVEMENTS THE phases of business cycles to which we apply the terms crisis and recession are marked, characteristically, by a gen- eral reduction of prices, a shifting of relative values and a downward readjustment of a great mass of creditor claims. The severity of these deflationary processes varies, of course, from cycle to cycle, being affected by all the forces at play in the cyclical fluctuations of business. Their character and con- sequences vary, also, with changes in economic organization. With a heavier burden of fixed expenses, with a more exten- sive debt structure, with a money economy that penetrates more deeply into the everyday activities of men, a general deflation and the readjustments it entails may be expected to place greater strains upon the economic system. This is not to say that the causal forces, if we could locate them, neces- sarily differ from time to time. Different reactions to these forces may be expected because the organization and operat- ing characteristics of the system at large have been modified with the passage of time. For this reason a survey of certain aspects of the most recent recession is of special interest. Here we may follow the process of deflation in a modern industrial economy and the movement towards readjustment on a new operating basis. With the single exception of the 1920—21 recession, which was so closely tied to the aftermat

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