ABSTRACT
Monetary equilibrium was said to exist, if at a certain instant, or in a certain period, and reckoned at the prices for the instant, the sum of the values of the excess demand in all the commodity-markets is zero, and the sum of the value of the excess demand in all the factor-markets is zero. This chapter discusses the problem of the relation between sums of excess demand and price-levels. The second problem which arises concerns the assumptions necessary for the simultaneous fulfilment of the two conditions, when considered as parts of a complete system. The chapter uses Myrdal's concept of monetary equilibrium is briefly related to the concept. The monetary excess demand in the commodity-markets must therefore be defined as a weighted sum of the values of the excess demands in the individual commodity-markets, the weights being the coefficients of price-inertia.
