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 II. The explanation of contemporary monetary phenomena and currency theory

Collection:: Economics Books

98 MODERN MONETARY SYSTEMS and thereafter are not to be explained solely by consider- ing the amounts produced but by a much more com- plicated set of circumstances, which cannot be adequately understood in the light of a purely deductive theory. Further, we observed that the confused notion of cur- rency depreciation closely bound up with that of excess production—the Quantity Theory—had led to an explana- tion of exchange problems which was sometimes ex- ceedingly faulty. The case of India, selected from among a number of others, clearly showed the common mistake of looking for the cause of an exchange crisis and for its appropriate remedy in a mere consideration of quantity, used in the abstract in observing any given currency. We saw that at the time when the problem first arose, the system of free coinage as applied to the rupee had the effect of making the rate of the rupee and the world price of silver interdependent, and that therefore the deprecia- tion of the rupee could not be attributed to the amount of silver circulating in India. It was also demonstrated that the recovery and, above all, the stabilisation of the rupee were not due to any diminution in quantity brought about by suspending the mint. For it was possible to resume minting without difficulty after freedom of coinage had been suppressed, at a time when the interdependence of the rate of the rupee and the price of silver had dis- appeared. Finally, we observed that the depreciation of the rupee and its stabilisation were accounted for simply by the technique of exchange operations. There is a whole theory to be set up in explanation of phenomena of this kind which we will describe later, and which cannot be deduced solely from the Quantity Theory. On the other hand, an analysis of the most recent monetary phenomena shows that even the internal de- preciation of a currency, as measured by a general rise in prices, is not always the result of an exceptional increase in its volume, but, on the contrary, that such an increase may be the result, in the first instance, of a rise in prices, this rise having been in turn caused by an exchange crisis. Such an analysis also shows that even a marked

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