by Francisco Oliveira
(Open Science Repository Economics)
Abstract: This paper argues that separating the price unit from currency units is necessary to achieve global economic stabilization. It expands on an earlier article, A global price unit independent from currency units, which proposed this as a solution for the world economy. The paper explains how balancing supply and demand depends on sound decisions to invest or disinvest, and how economic agents rely on information from the price system to make those decisions. It also explains why current economies disrupt the informative function of the price system, preventing markets from balancing supply and demand and thus from achieving economic stabilization. This is a theory that calls for further investigation and experimental testing.