Hicks — The Valuation of the Social Income

This our weekly discussion of the price level as it relates to Perry Mehrling's money view. The price level is the average price of goods in terms of money or, equivalently, the price of money in terms of goods. But what determines the price level? Why is the price level important? And how does it fit into the money view?

The idea of social income or overall quantity of national product has strong theoretical ties to the price level. Both require a model for how the "real value" of goods and services relates to their price in money.

For this week, we're reading John Hicks's 1940 article, The Valuation of the Social Income.

https://www.jstor.org/stable/2548691