ABSTRACT
What was true yesterday may be true today, but the truth which was significant yesterday may not be the truth which is significant today. When prices were slipping rapidly downhill in the deflation of 1920 and 1921, there were many who, sensing the fact that an artificial situation created by the war was disintegrating, leaped to the conclusion that there would be no stability until the pre-war price level was restored. As against an inference so little warranted, either by the history of earlier periods of deflation or by the character of the visible factors which might be expected to have a controlling influence upon the immediate situation, economists were altogether right in insisting that the rapid downward movement of prices could, and undoubtedly would be, stopped long before a level as low as that of 1913 was reached. Although confirmed by the subsequent course of events, that prophesy has now lost most of its significance for us.
