In reply to Hans' OPE-L 5313:
>In addition to Duncan's proposed mechanisms (1) - (3) in OPE-L 5311
>how credit money can function as a measure of value, I would like us
>also to consider the following mechanism:
>
>(4) It is the purpose of monetary policy to manage the value of
>money. The Fed is not trying to fix the labor content of a dollar,
>but to maintain prices at a stable level (which means a declining
>value of the dollar as productivity advances).
One question this raises is how, within Marx's theory, the central bank is
able to influence prices. In a gold standard system, for example, it can't,
since money prices are a reflection of gold prices.
Cheers,
Duncan
Duncan K. Foley
Department of Economics
Barnard College
New York, NY 10027
(212)-854-3790
fax: (212)-854-8947
e-mail: dkf2@columbia.edu