Re: (OPE-L) recent references on 'problem' of money commodity?

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Wed Nov 24 2004 - 18:28:43 EST

On Tue, 23 Nov 2004 cmgermer@UFPR.BR wrote:

> If you are merely interested
> in knowing how the prices will change with a change in the quantity of
> paper money, 

Well, I would not say "merely" interested in.  I would say that I am
"mainly" interested in this question right now, which is not to say that
other questions are not important.  I think the quantitative aspect of
Marx's theory is very important.  Indeed, the main goal of Marx's theory
is to explain dM, a definite quantity, which depends in part on the
MELT.  Therefore, it is important to figure out this quantitative aspect
of Marx's theory, including the determination of the MELT in today's
monetary conditions.  

> this is in principle very simple in Marx’s theory: whenever
> there is paper money (which means inconvertible paper money issued by the
> state) IN EXCESS of the needs of the circulation, the paper money will
> depreciate and the prices expressed in terms of paper money will rise,
> i.e., there will be inflation, although the money prices (expressed in
> real money, i.e., gold) remain unchanged. In one paper of mine I called
> the former ‘standard prices’ and the latter ‘money prices’ in order to
> distinguish them clearly. However, the paper standard goes on representing
> a definite amount of gold, smaller than the official standard, as you
> mention in your working paper in the section about inconvertible fiat
> money.

As I said in my last post, I agree with this, except that I think it can
be made more quantitatively precise.  Not just that "excess paper money
causes prices to rise", but also that the increase of prices is
proportional to the excess of money, as I showed in my last post.  


Claus, which paper of yours are you referring to here?  I would like to
take a look.  


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