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 I. Modern monetary systems and their operation

Collection:: Economics Books

84 MODERN MONETARY SYSTEMS Since Rasin’s death the crown has resumed its upward course, but up to the end of 1922 with continuous and wide fluctuations. The significance of the currency experiment in Czechoslovakia up to this time can, how- ever, be described. In the first period under consideration we have seen how a vigorous, honest monetary policy, based on a considerable sacrifice by the taxpayer and on a strict limitation of the note issue, and supported from the beginning by some power to influence the exchange market (centralization of foreign exchange operations and use of the holdings of foreign bills), succeeded in separating the Czech crown from the Austrian and in sending up the former. During the second period, we observe that contraction is insufficient to produce a permanent recovery in the exchange and a fall in domestic prices. Although the note issue is limited, the Czech crown follows the mark and collapses with it ; an increasing loss on exchange provokes, in spite of various remedies, a rise in domestic prices, in other words, the depreciation of the currency at home. During the third period, when favourable circumstances prevail—above all she recent constitution of a large stock of foreign exchangel and the successful intervention on the exchange market of the Banking Depariment—the Czech crown definitely breaks with currencies which continue to depreciate. But although during this period there is a renewed effort to deflate, iz is clear that deflation does not influence the exchange in the way certain theoretical writers have supposed, i.e., by a fall in home prices which pro- motes the recovery of the balance of payments and so also of the exchange. For the exchange value of the crown rose before the fall in home prices occurred, and it is, on the contrary, the diminution of the loss on exchange for importers and of the exchange premium for exporters which causes home prices to be adjusted at a lower level. 1 Tt should be added that at the beginning of 1922 the Czech Govern- ment had succeeded in again obtaining foreign loans of considerable dimensions, viz., £2,300,000 in London, £500,000 in Amsterdam and 14 million dollars in New York.

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