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Hall and Price Level


  • Robert E. Hall


Governments determine the size of the unit of value just as they determine the length and weight of physical units of measure. What are the different ways that a government can control the size of the unit of value, that is, control the price level? In general, the government designates a resource-gold, paper currency, another country's currency-and defines its unit of value as a particular amount of that resource. An interesting variant, proposed by Irving Fisher in 1913 and implemented more recently in Chile, is to alter the resource content of the unit to stabilize the price level. Another idea is to alter the interest rate paid on reserves in a way that stabilizes the price level. This essay originally appeared as "Controlling the Price Level,""Contributions to Macroeconomics" 2(1), Article 5. See . Reprinted with kind permission of the Berkeley Electronic Press. Copyright 2005 American Journal of Economics and Sociology, Inc..

Suggested Citation

  • Robert E. Hall, 2005. "Hall and Price Level," American Journal of Economics and Sociology, Wiley Blackwell, vol. 64(1), pages 93-112, January.
  • Handle: RePEc:bla:ajecsc:v:64:y:2005:i:1:p:93-112

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    References listed on IDEAS

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    8. Joseph Gyourko, 1991. "How accurate are quality-of-life rankings across cities?," Business Review, Federal Reserve Bank of Philadelphia, issue Mar, pages 3-14.
    9. Fedderke, Johannes & Klitgaard, Robert, 1998. "Economic Growth and Social Indicators: An Exploratory Analysis," Economic Development and Cultural Change, University of Chicago Press, vol. 46(3), pages 455-489, April.
    10. Hirschberg, Joseph G. & Maasoumi, Esfandiar & Slottje, Daniel J., 1991. "Cluster analysis for measuring welfare and quality of life across countries," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 131-150, October.
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