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Politics : Mainstream Politics and Economics -- Ignore unavailable to you. Want to Upgrade?

To: grusum who wrote (6874)	1/14/2012 11:04:51 AM
From: Little Joe	Read Replies (1) \| Respond to of 85487

I dont understand how you can count only dollars as money. that would be the equivelent of saying that bank savings and demand deposits do not affect prices, which they clearly do. sjsu.edu The above site shows us how all of the monetary aggregates performed during the depression years, and it does show increases in currency in circulation, so I agree with your claim that currency in circulation increased during the depression. However, as stated above demand deposits and savings deposits and other components of the money supply decreased. The reason they have to be included is that they are dollar equivelents i.e. easily convertible into dollars. You may be right about the stock market but so far as I know stocks are not part of any monetary component. However, if the stock market were wiped out it is likely that much of the debt would be liquidated and this would reduce the money supply significantly. lj