Modern monetary systems

Bibliographic data

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 III. Monetary theory and its application in practice

Collection:: Economics Books

206 MODERN MONETARY SYSTEMS character. It has existed as between two markets in the same country ; it may also disappear in settlements as be- tween markets affecting various countries and be replaced by some other process of clearing which is still more economical and capable of being carried out at a fixed cost. The substitution of a process of settlement at a fixed cost for the process of settlement at a variable cost which results from present exchange mechanism may, however, havedifferent economic results according to circumstances. Between two markets which have a single monetary circulation entirely common to both, as is the case, for instance, with settlements between two markets or dis- tricts in the same country, the fact that the rates of transfer are low and fixed is obviously convenient; for nothing should limit transactions except the resources of the in- dividuals who take part in them. If an inhabitant of Marseilles has 100,000 francs to spend he 1s able to spend them as easily on purchases in Paris as on purchases in Marseilles. He will therefore not be inclined to purchase more in Paris than he can pay for there. On the other hand, the situation is different as between two markets or two countries which have no currency in common. Take two countries each of which only has a national and inconvertible paper currency; a mer- chant at Genoa who has 100,000 paper lire to spend cannot make purchases at Marseilles with his own currency and he may have some difficulty in obtaining the French francs which he requires for this purpose. In these circumstances, the mechanism of the exchange has the advantage of enabling him to obtain these francs iz so far as the exchange of goods between the two countries has thrown francs on the market and also, it may be said, of supplying francs az a rate more or less bound up with the balance of debts and credits between the two countries, and that it will automatically stimulate or repress purchases abroad according as the balance is positive or negative. In the absence of any other method of settlement recourse must be had to the setting off of debts and credits against each other; and it may be said that the exchange market

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