VII
Sofar，wehavebeenprimarilyconcernedwiththewayinwhichchangesinthequantityofmoneyaffectpricesintheshortperiod。Butinthelongrunistherenotsomesimplerrelationship？
Thisisaquestionforhistoricalgeneralisationratherthanforpuretheory。Ifthereissometendencytoameasureoflong-rununiformityinthestateofliquidity-preference，theremaywellbesomesortofroughrelationshipbetweenthenationalincomeandthequantityofmoneyrequiredtosatisfyliquidity-preference，takenasameanoverperiodsofpessimismandoptimismtogether。Theremaybe，forexample，somefairlystableproportionofthenationalincomemorethanwhichpeoplewillnotreadilykeepintheshapeofidlebalancesforlongperiodstogether，providedtherateofinterestexceedsacertainpsychologicalminimum；sothatifthequantityofmoneybeyondwhatisrequiredintheactivecirculationisinexcessofthisproportionofthenationalincome，therewillbeatendencysooneror[Page307]THE
THEORYOFPRICES
laterfortherateofinteresttofalltotheneighbourhoodofthisminimum。Thefallingrateofinterestwillthen，cet。par。，increaseeffectivedemand，andtheincreasingeffectivedemandwillreachoneormoreofthesemi-criticalpointsatwhichthewage-unitwilltendtoshowadiscontinuousrise，withacorrespondingeffectonprices。Theoppositetendencieswillsetinifthequantityofsurplusmoneyisanabnormallylowproportionofthenationalincome。Thustheneteffectoffluctuationsoveraperiodoftimewillbetoestablishameanfigureinconformitywiththestableproportionbetweenthenationalincomeandthequantityofmoneytowhichthepsychologyofthepublictendssoonerorlatertorevert。