The error in tehe "fundamental equations": a new interpretation

Citation
K. Rubner-peterson,, The error in tehe "fundamental equations": a new interpretation, American economic review , 24(4), 1934, pp. 595-602
Journal title
ISSN journal
00028282
Volume
24
Issue
4
Year of publication
1934
Pages
595 - 602
Database
ACNP
SICI code
Abstract
After a résumé of the previous disussion btween J.M. Keynes and A. H. Hansen, it is shown that the error disappears when the definition of Mr. Keynes's units of goods in changed. On account of the changes definition the qequations apply to profit levels instead of to price levels. Therefore, following Mr. Keynes's suggestion for stabilizing prices throught control of the volumes of investments and savings will result in a constant profit level instead of in a constant price level. This is demonstrated by an exemple. Since changes in profits, rather than changes in prices, are the underlying causes for the buisness cycle, the value of the quations is echanced by the new interpretation. On the other hand the equations valid for a more complex society certain factors, not taken into account at present, will have to be included in them.