ABSTRACT
This chapter deals with two broad issues that have arisen again and again in connection with movements in the general level of prices. One issue is the connection between such price movements and changes in the supply of money. The other is the relation between price changes and changes in output. The chapter presents some implications for policy that are suggested by the relation between monetary and price change and between price change and output change. Over the longer periods considered in the preceding section, changes in the stock of money per unit of output tend to dominate price changes, allowance being made for the effect of the growth of real income per head. The preceding account of the relation of money to prices over long and short periods and of price changes to output changes has some fairly direct and immediate implications for public policy with respect both to growth and stability.
