Die deutsche Wirtschaft

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Monograph

Identifikator:: 1689946490

URN:: urn:nbn:de:zbw-retromon-101093

Document type:: Monograph

Title:: Die deutsche Wirtschaft

Place of publication:: Berlin

Publisher:: Hobbing

Year of publication:: 1926

Scope:: 528 Seiten; Illustrationen

Digitisation:: 2020

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: 16. Deutsche Wirtschaftsbeziehungen zu Österreich

Collection:: Economics Books

Full text

NORMAL EXCHANGES 22¢ suffer from an exchange which did not correspond to the purchasing power parities if the difference were so great that this parity could not alter with sufficient rapidity.! But, if circumstances allow, the rate of exchange might be progressively raised in successive stages up to the normal par. For itis the object of stabilisation not to fix at one blow an invariable rate of exchange, but in the first place to protect the exchange from violent fluctuations and above all from any further depreciation and in the end to put the country concerned in a position to govern its own exchange. The question arises whether the inauguration of this rational and simple system, which is really nothing but a modern adaptation of the gold standard systems with con- vertible paper, requires preliminary or ancillary measures such as the reduction of the note issue or the centralisation of exchange operations. In our opinion, the reply to this question must vary according to the country under consideration. Taking first the possibility of an immediate contraction of the currency, it does not seem as though this step is absolutely essential in a country where the volume of currency is appropriate to the level of prices and where proper account has been taken of that level in fixing the rate of stabilisation. For the effective use of a gold reserve does not depend, under a system of convertibility, on the ratio between the volume of gold or gold credit available and the volume of fiduciary currency, but on the ratio between the amount available in foreign currencies and the debit balance in international trade which has to be met. Therefore, if the volume of internal currency corresponding to a higher level of prices in that currency is much higher than the pre-war figure, the amount of gold necessary in order to meet international payments should never be fixed except in relation to gold prices. It may, therefore, be fairly independent of the level ! It may indeed be feared that the purchasing power parity will alter much less easily with a rising than with a falling exchange. As has been shown above, the loss on exchange sends up internal prices and prices have a tendency to become stabilized at the new level in spite of factors tending to bring about a fall.

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