CH. 16

CAUSES OF A DISEQUILIBRIUM

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to changes of Type II., whether of category A, B, orC, tend to work themselves out via changes of TypeIII.,—though changes of Type II. B may also set upchanges of Type I. ; and that changes of Type III.finally establish a new position of equilibrium after aseries of oscillations caused by their reacting on andinteracting with a further series of changes of Type II.

We will deal in some detail with these varioustypes of disturbance in the following chapters.Changes of Type II. B, and changes of Type II. Cwhere the external disequilibrium is due to changeseither at home or abroad of Type II. B, and not ofType II. A, correspond, I think, to what is usuallydiscussed under the designation of the Credit Cycle.We shall see that there is a certain appropriatenessin this description, because in this case we havean oscillation about an unchanged position of equi-librium and not a transition from one position of equi-librium to another. On the other hand, the oscillationis not necessarily of a strictly cyclical type, and itscharacteristics shade off into the not very dissimilarcharacteristics of the oscillations which attend anymonetary change, including a transition from oneposition of equilibrium to another.

Spontaneous changes of Type III. need not beseparately discussed, because when they occur theirsubsequent history will be the same as that of similarchanges caused by prior changes of one of the othertypes.

Nor do we need to introduce Changes due toFinancial Factors as a separate type, since these, aswe have seen in the previous chapter, operate eithervia Type I. above by modifying the supply of moneyavailable for the Industrial Circulation, or via, Type II.by modifying the attractiveness of new Investment orof Saving.