by Francisco Oliveira
(Open Science Repository Economics)
Abstract: This article demonstrates the need for separation of the price unit from currency units to achieve global economic stabilization. It is a further explanation of a previous article called A global price unit independent from currency units proposed as a solution for the world economy. It explains how balancing of supply and demand depends on sound decision of investment or disinvestment and how economic agents rely on information from the price system to take that decision. It also explains why our present economies mess up with the informative function of the price system preventing markets to achieve balance of supply and demand and consequently economic stabilization. This is a theory that needs further investigation and experimental tests.