Modern monetary systems

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Monograph

Identifikator:: 1753210836

URN:: urn:nbn:de:zbw-retromon-128414

Document type:: Monograph

Author:: Nogaro, Bertrand http://d-nb.info/gnd/117039713

Title:: Modern monetary systems

Place of publication:: London

Publisher:: King

Year of publication:: 1927

Scope:: XII, 236 S.

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part II. The explanation of contemporary monetary phenomena and currency theory

Collection:: Economics Books

CURRENCY AND PRICE MOVEMENTS 1135 sarily react on prices, in the manner indicated by the heory ; they hold that this reaction will be continuous and proportional to the changes in the stock of money, whatever the extent of such changes. In spite of the impossibility o separating, in any attempt at proof, the Quantity factor of money from other factors which may influence prices, some authors will even hold that quantitative changes in the circulation will overcome, absorb and ultimatel neutralise the influence of other factors. Mr. Irving isher has said only recently that the general price level cannot rise for any considerable period except as a result of an increase in the circulation and cannot fall except as the result of a decrease in the circulation. A fairly simple explanation of this automatic and rigi conception will be found in the following argument. If] as a result of some technical cause, prices tend to rise, but the existing stock of money is insufficient to purchase all the goods offered at the new level, the demand will necessarily fall off and prices will then fall back to th previous level. If, on the other hand, prices tend to fall, the currency which has thus been set free will nevertheless nfluence the market, create a fresh demand and force up he general price level. Hence the existing stock of money vill always be sufficient for transactions to be completed, prices being adjusted automatically by the scarcity o money. Thus money will always be, as it were, absorbed by goods; for this reason no lasting fall in prices can occur without a decrease in the circulation. This theory, to which we shall return, seemed to acquire eculiar force in the writings of certain economists, who ut it in rather a different form. They consider that rices express two kinds of relations, the exchange ratio etween goods and the exchange ratio between goods and oney, as though these two kinds of relation were estab- ished successively and as if transactions, once concluded, reve a demand for money. If the problem is put in this orm the Quantity Theory is greatly reinforced, because he supply and demand of a medium of exchange will be greater or less according as that medium is present i

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