Page:Stabilizing the dollar, Fisher, 1920.djvu/250

196 number without greatly lessening the efficiency of stabilization.

G. General Conclusions on Variations from the Assumptions of the Standard Case. We have seen that the stabilization device is such as to adapt itself, in a remarkable degree, to widely varying conditions.

The brassage charge may be anything from, say, 1% to 3% without greatly affecting the results and also (under any ordinary conditions) without impairing greatly the efficiency of stabilization.

The adjustment of the dollar's weight may be anything from, say, ½% to 2% per 1% of deviation without very greatly impairing the efficiency of stabilization,—at least under reasonable assumptions as to the other factors (influence, tendency, lag, and brassage).

The influence of the adjustment on the index number may be anything from, say, ½% to 2% per 1% of adjustment without greatly affecting the results,—at least under reasonable assumptions as to the other factors.

The lag may vary widely relatively to the adjustment interval. Practically this means that the frequency of adjustment may (other things equal) be anything from, say, a quarter of the lag to many times the lag without greatly restricting stabilization.

The tendency of prices to rise or fall may be permanently rapid and temporarily very rapid without often pulling the index number more than 1 or 2% from par,—assuming the other factors which affect stabilization (brassage, adjustment, influence, lag) to be as in the standard case. And no matter how great the tendency of prices to vary, almost all of this tendency can be eliminated if those other factors are adapted to the situation.

Practically, the problem is to secure the most ideal adaptation of these other four factors to the tendency as it exists.

The tendency (barring extraordinary times such as those of the Great War) has seldom averaged for long more than 4% per annum, which is more than the