Even before I came to Chicago, I had gotten interested in the existence of dispersion of prices under conditions which economic theory said would yield a single price.
Sentiment: NEGATIVE
The history of the twentieth century - America's century! - has been pretty much a history of rising prices.
There's a very good reason for why economics developed the way it did, and that is that in many situations, the assumption that people will exploit the opportunities available to them is very plausible, and it simplifies the analysis of how markets will behave.
I had always been interested in markets - specifically, the theory that in financial markets, goods will trade at a fair value only when everyone has access to the same information.
To economists, prices serve as crucial signals to producers and consumers. In a regulated market, the state sets prices high enough for private companies to cover their costs and earn a guaranteed profit for their investors. But in a deregulated market, prices should vary with demand and supply.
I had become interested in economics, an interest that was transformed into a lifetime dedication when I met with the mathematical theory of general economic equilibrium.
I started working and publishing in price theory by 1938.
It's like simulating earthquakes: we can over and over study a bubble, crash, bubble, crash. Then we can see mathematically if there's some regular pattern and what's going on in people's brains when prices are going up and before the crash is happening.
At the end of 1964, wholesale prices had been relatively stable for some years.
I come from Chicago, and the landscape of the Midwest has always meant a great deal to me.
I don't think anybody's really been successful with theorizing about value or creating a price theory.