Coherent Identifier About this item: 20.500.12592/9q30t6

The Indian Journal of Economics October 1941




This is shown by the ultimate shift of the marginal efficiency curve to the right from mi to m2 exactly by the same amount as the shift in the supply curve from si to s. When the shift of the marginal efficiency curve to m. comes about the rate of interest is determined by the intersection of curves s2 and m2. [...] The result of the immediate shift of m curve to m2 is that the rate of interest falls only by a small amount to i2 the fall being smaller than would be the case if the m curve remained in position mi in which case the rate of interest would have declined to This fall to i is prevented by128 A. KRISHNASWAMY the optimism of investors hopeful of rising prices and in fact the consequent rise of the [...] 2-4 to shift in the same direction; and the effect on the rate of interest of the shift in one is compensated by the shift of the other. [...] Thus it amounts to the same thing if we say that the rate Of interest rises because the supply of loans is curtailed as when we attribute the rise in the rate of interest to the increase in the velocity of circulation of money. [...] This is so because in the Keynesian and Marshallian examples (immediate effects of changes in the supply of money on the rate of interest) the supply of loans moves in the opposite direction to the velocity of circulation so that the movements of the one can be described by implication in terms of the associated movements of the other.


commerce industry

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