CONTENTS

xv

CHAPTER 26

PAGE

The Activity op Business ...... 79

(i.) The Influence of Business Activity on the Velocity of the

Business-deposits . . . . . .79

(ii.) The Relation between the Bank Clearings and the Volume

of Trade ....... 82

(iii.) Statistical Summary . . . . . .88

BOOK VI

THE RATE OF INVESTMENT AND ITS FLUCTUATIONSCHAPTER 27

Fluctuations in the Rate op Investment— I. Fixed Capital . 95

(i.) The Statistical Indications . . . . .97

(ii.) Theories of the Credit Cycle based on Fluctuations in Fixed

Capital Investment ...... 99

CHAPTER 28

Fluctuations in the Rate op Investment —II. Working Capital 102(i.) The Statistical Indications ..... 103

(ii.) The Theory of Working Capital .... 116

(iii.) Productive and Unproductive Consumption . . . 124

(iv.) The True Wages Fund ...... 127

CHAPTER 29

Fluctuations in tiie Rate of Investment—III. Liquid Capital 130(i.) Mr. Hawtrey’s Theory of Liquid Stocks . . . 131

(ii.) The Obstacles to an Accumulation of Liquid Capital . 133

(iii.) The “ Carrying ” Costs ...... 135

(iv.) The Equation relating Price Fluctuations to “ Carrying ”

Costs ........ 140

(v.) The Theory of the “ Forward Market ”... 142

(vi.) Conclusion ....... 145