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 contraction, reason has already been given for doubting: in both it was probably caused by the collapse of trade which followed the discovery, first made in the Far East, that if people stopped buying prices would fall back. But it is undoubtedly true that inflation, up to a certain point, stimulates the home demand for goods, and so maintains employment and also that, while it is proceeding, it gives a temporary help to the export trade of the country that indulges in it.

The benefit wrought by inflation in tae home market is easy enough to see. Since inflation means multiplication of money in relation to goods and a consequent rise in prices it is clear that this process, especially when it goes so fast that everybody can see what is happening, makes folk eager to get rid of their money quickly, because it will buy less if they keep it another day, and to buy goods, because they will be dearer if they wait. Dr. Rasin describes very graphically, in the work already cited, the result of "want of confidence in the Krone" in Czecho Slovakia, even in its comparatively mild manifestations during the war. "Thus," he says (page 15), "with every failure of the Central Powers an aversion to the Krone set in, manifesting itself in the purchase of foreign currency (especially at the time before