PART II
FURTHER ELUCIDATIONS
§ I. The Supply of Currency and the *' Quantity
Theory.”
The sad experience of unlimited currencies which
followed the writing of the First Part of this book do
not suggest the desirability of abandoning or even
modifying any part of the doctrine taught therein,
but they do suggest that further elucidation of
several matters is required.
Some readers have asked, and others probably will
ask, ‘“ What is the relation of this doctrine to the
Quantity Theory of the value of money ? ”
It includes the Quantity Theory, but contains
something more. The Quantity Theory, like so
many other statements in economic literature, insists
that X ‘“ depends on A, other things being equal or
remaining the same,” regardless of the fact that it
would be equally true to say ‘“ X depends on B, other
things (including A) being equal or remaining the
same.” It is possible that there may be ten or a
thousand things on which X depends, and of each of
them it is true to say that it depends’on that one when
the others are, as it is said, “‘ impounded in ceferis
paribus.” Writers on economic questions frequently
overlook this, and imagine themselves at variance
about fundamentals, when in fact the only difference
between them is that one is more struck by the
importance of A and therefore says ‘“ X depends upon
A, other things (including I} being equal,” while the
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