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In other words, the expectation of a relative stickiness of wages in terms of money is a corollary of the excess of liquiditypremium over carryingcosts being greater for money than for any other asset. Thus we see that the various characteristics, which combine to make the moneyrate of interest significant, interact with one another in a cumulative fashion. The fact that money has ghd straighteners low elasticities of production and substitution and low carryingcosts tends to raise the expectation that will be relatively stable; and this expectation enhances money’s liquiditypremium and prevents the exceptional correlation

between the moneyrate of interest and the marginal efficiencies of other assets which might, if it could exist, rob the moneyrate of interest of its sting. Professor Pigou with others has been accustomed to assume that there is a presumption in favour of real wages being more stable than moneywages. But this could only be the case if there were a presumption in favour of stability of employment ghd boho chic limited edition . Moreover, there is also the difficulty that wagegoods have a high carryingcost. If, indeed, some attempt were made to stabilise real wages by fixing wages in terms of wagegoods

The effect could only be to cause a violent oscillation of moneyprices. For every small fluctuation in the propensity to consume and the inducement to invest would cause moneyprices to rush violently between zero and infinity. ghd pink limited edition That moneywages should be more stable than real wages is a condition of the system possessing inherent stability. Thus the attribution of relative stability to real wages is not merely a mistake in fact and experience. It is also a mistake in logic, if we are supposing that the system in view is stable, in the sense that small changes in the propensity to consume and the inducement to invest do not produce violent effects on prices.