THE ECONOMY AND ITS MONEY

Hastings Lyon *01. New York, John Felsberg, Inc., 1947. 112 pp.

This small book is an informative essay on the place of money and interest in the economy. The principal topics discussed are: real price and monetary price; factors determining the amount of money; changes in the use of money and the price structure; money and the rate of interest; the price of gold; and international transactions.

The general thesis is that the inflationary methods of maintaining employment in vogue today depend on an illusion. The injustices and disorganization that accompany price inflation should be avoided. A wiser policy is to adjust the structure of prices flexibly so that the market will be cleared at relatively full employment.

Much emphasis is placed throughout the book on the adjusting mechanism of prices, and especially on adjustments between currently produced goods, past goods, and future goods. This approach is applied ingeniously in the treatment of money and tile rate of interest.

Since this is a rather technical and closelyreasoned essay, its principal appeal will be to those interested in monetary economics. It is recommended to this group as a stimulating and thought-provoking piece of work.

The author is a graduate of Dartmouth College in 1901, and was Professor of Finance in the Tuck School, 1912-1916. Since 1916 he has been Professor of Finance in the School of Business, Columbia University.