The daily expenditures by consumers for new consumers' goods, upon which business stability largely depends, are determined in part by the total volu… - William Trufant Foster
" "The daily expenditures by consumers for new consumers' goods, upon which business stability largely depends, are determined in part by the total volume of money in circulation, in part by other factors including the frequency with which that money is returned to consumers. The flow of money, therefore, from use in consumption to another use in consumption should not be overlooked in studies of the causes and conditions of business fluctuations. It is the purpose of this paper to describe certain aspects of this circuit flow of money, to raise the question whether it does not deserve more attention that it has yet received in our analyses of business cycles, and to suggest pertinent lines of investigation. Unfortunately, the statistics upon which the most important conclusions concerning this subject must be based are not at hand and are not likely to be for a long time to come. The following discussion will have served its purpose if it stimulates further inquiry in profitable directions and helps to hasten the day when the necessary statistics are available.
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About William Trufant Foster
(January 18, 1879 – October 8, 1950), was an American educator and economist, whose theories were especially influential in the 1920s. He was the first president of Reed College.
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Additional quotes by William Trufant Foster
At home, as well as abroad, there is paralyzing uncertainty among business men as to whether the Reserve Board will allow that expansion of bank credit without which such prosperity as we have had in recent years simply cannot last. In short, the Board has created a state of mind which breeds business depression.
The diagram on the opposite page, similar in plan and purpose to one devised by Mr. M. C. Rorty, represents, in a general way, the circuit flow of money. To find fault with this diagram from an engineering standpoint would not be difficult; neither would it be sensible. All we should ask of these reservoirs and pipes is that they serve the purpose at hand. In the main, subject to certain qualifica qualifications to be made presently, this diagram does serve our purpose. It pictures the flow of money when business is relatively stable.
Unless disputants understand the meaning attached by each other to the terms of a controversy, they may worry along indefinitely without making an inch of progress. The contending parties may think they agree on the proposition, when, as a matter of fact, their apparent agreement is due to ambiguity in the use of the terms. On the other hand, the contending parties may work themselves into a quarrel over imaginary disagreements concerning ideas, when in fact they are merely confused as to the meaning of words. Disputes which seem interminable are sometimes ended abruptly and happily upon the accidental discovery that the parties in dispute agreed all the time as to the real questions at issue, while neither side understood what the other side meant.
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