Page:Stabilizing the dollar, Fisher, 1920.djvu/106

52 trade. And back of these causes (gold money, paper currency, deposit currency, their respective velocities, and trade) lie innumerable other causes acting through one or more of them.

The relative importance of the several causes in affecting price levels varies with circumstances. Thus, in 1914 at the first shock of war, there were very complicated changes including a slowing-down of trade and of the velocities of money and of the deposit or check circulation and a temporary shift from credit to cash. But in almost all great and prolonged price movements the chief factor is the quantity of money. Seldom has the volume of trade been the chief factor; for statistics show a great steadiness in the growth of the volume of trade.

We may conclude, on the basis of all the evidence, that to monetary causes in general (money, deposits, and their velocities) we should ascribe the great bulk of almost all changes in the price level. In short the chief causes of the variations in the purchasing power of the dollar are to be found in the dollar itself.