ABSTRACT
This chapter explains the Stockholm School's treatment of saving-investment problem. When the inflation is repressed, prices are fixed by the public authorities, in some way or other, either by maximum prices, or simply by price-ceilings and wage-ceilings. The assessment system, which was formerly in operation in Sweden and in other Scandinavian countries, is the system which the state imposes payments of certain sums of money according to people's declarations of their incomes for an earlier period, with the help of fixed scales of taxes made out for the financial year. During inflation that is quite a common practice, especially on the part of retail traders, who may reserve commodities privately for specially chosen customers, who are not allowed to clear the stocks in one period. During open inflation, increases of prices and wages become of the greatest significance, not only for the changes in taxes due, but also for the expenditure of the state on purchases of goods and labour-power.
