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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Document type:: Monograph

Structure type:: Chapter

Title:: Part III. Monetary theory and its application in practice

Collection:: Economics Books

igo MODERN MONETARY SYSTEMS in the purchasing power of the currency between the moment when he receives it and the moment when he expends it, either on purchasing new supplies or on objects of personal consumption.! Wage-earners obtain rises in salary which are more or less proportionate to the new purchasing power of the currency; small wage- earners usually succeed at the beginning of a crisis in keeping up the full purchasing power of their earnings, whereas high wage-earners, and in particular the higher grades of officials, are sacrificed. On the other hand, per- sons with a fixed income, derived from fixed interest- bearing securities, only receive the nominal sum provided in their contracts without any coefficient of increase. House-owners are also bound by their contracts, wher- ever they have signed leases, and often meet with legal obstacles when they attempt to raise rents in new con- tracts in the same way in which traders alter their selling prices. As regards public expenditure, variations in the pur- chasing power of the currency will affect it through salaries of staff and the purchase of material; it is not affected by loans contracted before the depreciation set in and is comparatively little affected by subsequent loans, since the rate of interest does not rise in proportion to the decline in the purchasing power of the currency. On the other hand, State receipts may increase nearly in proportion to the depreciation of the currency owing to the indirect taxes and taxes on income which more or less follow the advance in prices. And so, in the absence of any uniform rule to counteract their effects, changes in purchasing power of money bring about serious dis- turbances in legal and economic relations. Moreover, the resulting inequalities may have the curious result of promoting budgetary equilibrium to a certain extent, as the Budget, in countries where the public debt forms a large part of the public expenditure, benefits by the small 1 Hence, as we have seen, he will discount this possible depreciation and raise selling prices above the level already reached and so provoke again the very depreciation which he is trying to avoid.

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