On a Robert Wenzel blog posting, he wrote, “price level is the result of three components: Money supply, the demand to hold cash and productivity.”
Does Mises say anything similar to this? If so, where?
I suppose you could find something if you looked, but it’s not really complex…
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Prices are ratios…the value of one thing in terms of another. (i.e. when you say something is $5, it means that the value of the object is 5 times that of a dollar)
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Prices are determined by supply and demand.
All Wenzel is saying is that prices are the result of the supply and demand of dollars, and the supply (as determined by productivity) of everything else. (I suppose the “demand” for everything else is implied).
See here:
Prices are not the value of one thing in terms of the other. The exchange takes place precisely becuase the two commodites are valued differently, and so one cannot be the value in terms of the other.
So what is a price? A price is an exchange ratio between two commoditis or, in the case of a money price, between money and a good/service. Nothing more!