Excerpt from The Journal of Home Economics, 1921, Vol. 13 We have now come to the break. Prices are falling. They must fall. We have the psychology as well as the fact of the falling prices. The consumer today refuses to buy, not for the opposite reason Of his willingness to buy a year ago - that he had money then and has no money now; that is not the primary motivation at all. A year ago the consumer believed that the trend of prices was still rising. Today the consumer believes that the trend of prices is falling and that he can accelerate that trend by refusing to buy. The consumer found to his bitterness a year ago that by his buying he hastened the trend of prices upwards, and he reasons now that in a Similar way by refusing to buy he can accelerate the trend of prices downwards. And this is correct. The only question is: To what extent is it wise to accelerate the curve of prices downwards? Now, a panic is little more than an accelerated run of price deflation. If prices are to fall, and they must fall, and then on the basis Of reduced prices consumption is to be maintained, it is apparent that the refusal of the consumer to buy cannot go to the point of lowering production so profoundly that it will be later unequal to the demand. In other words, the ideal method of price deflation is that it taper ofl gradually. If deflation occurs precipitously, it leads to such profound disorganization of the processes Of production that later when the demand comes supply cannot be maintained and prices again rise, or in any event exhibit startling instabilities. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.