14 
Inflation and Stabilization 
which cannot be made to function normally until 
wages and the cost of living have been brought 
into a certain equilibrium with wholesale prices. 
On the other hand, if a rapid inflation has been 
going on for some time, wholesale prices are likely 
to have been brought up to a higher level than 
wages and the cost of living, and it may be worth 
while so to choose the level of stabilization that 
it involves a certain deflation of wholesale prices. 
The aim must always be, with the least possible 
friction and disturbance, to arrive at a level of 
stabilization at which a true economic equilibrium 
will most easily establish itself. 
Under difficult circumstances, it is natural 
enough to choose a value for the new currency 
slightly lower than what would correspond to the 
general level of prices in the country. As it is 
impossible to know exactly the right level of sta- 
bilization, it may be thought advisable to have a 
certain margin of safety. This is, at any rate, better 
than to choose such a high value for the currency 
as will imperil the whole process of stabilization. 
If, thus, the currency has become stabilized at too 
low a level, this means that the purchasing power 
of the currency as measured by existing price 
levels is too high and will have to be brought down 
by a process of inflation. There will generally not