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- Title
EMPIRICAL TESTS FOR PRICE THEORIES: FISHER, FOSTER AND CATCHINGS, KEYNES.
- Authors
Walsh, Robert M.
- Abstract
The article presents an empirical analysis of various price theories. The field of economics is faced with the difficulty of establishing controls. It is generally difficult to set up experimental controls but some post facto controls may be created. The price equation evolved by mathematician Irving Fisher lends illustrates methods to create such controls. Since Fisher first published his results, various other hypothesis concerning the origins of price changes have been put forward, notably those by R.G. Hawtrey, D.H. Robertson, F.A. Hayek and J.M. Keynes. Under the assumption that the equation balances at all times, the quantity relationship of money and volume of trade to prices can be considered true. The Fisher equation can be reduced to index numbers without serious difficulty. In his equation, Fisher from the start employs a price relative. Fisher says that it is impossible to secure accurate statistical measures. Nevertheless Fisher has verified his formula. The best actual price indexes for purposes of this test are those for consumers' goods, especially indexes of the cost of living.
- Subjects
MICROECONOMICS; PRICE regulation; SUPPLY &; demand; KEYNESIAN economics; FISHER, Irving, 1867-1947; HAWTREY, R. G.; PRICE indexes; COST of living; ECONOMIC indicators
- Publication
Quarterly Journal of Economics, 1934, Vol 48, Issue 3, p546
- ISSN
0033-5533
- Publication type
Article
- DOI
10.2307/1882826