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 II. The explanation of contemporary monetary phenomena and currency theory

Collection:: Economics Books

102 MODERN MONETARY SYSTEMS phrases which express one and the same relation for the proof of a relation of cause and effect, currency deprecia- tion is said to “provoke” a rise in prices. This proposi- tion, very incorrectly stated, presupposes a relation of cause and effect, not between the rise in prices and the depreciation—expressions which are only applicable to one and the same phenomenon—but between the rise in prices or the depreciation and some factor to which it is attributed, such as an increase in the volume of currency. This is, no doubt, an hypothesis which deserves to be considered ; but it 1s desirable not to embody in a chain of reasoning, by a mere confusion of words and ideas, a notion which itself requires justification. Nevertheless it is supposed, in virtue of the old law of supply and de- mand, ‘“‘that prices change when the amount of currency varies, the amount of commodities remaining constant, and vice versa.” Starting with this principle, it is tempt- ing to attribute any upward or downward price movement to a change in the volume of currency. If all prices move at the same time and in the same direction, surely it is much more reasonable to attribute this general pheno- menon to some general cause than to suppose that changes are taking place in the various factors, such as the cost of production, which may separately exercise a similar in- fluence over the value of each of the objects sold. This plausible argument loses much of its force when we come to consider, on the one hand, that so-called ‘general ”’ upward or downward movements are often nothing but averages, and on the other that a rise in a few com- modities (raw materials, motive power, etc.),! with an effect upon the price of many others, is sufficient to pro- voke such average movements. Hence it appears that moderate variations occurring in periods undisturbed by crises need not necessarily be attributed, « priori, to a monetary cause. 1'The relation between prices may also be more complicated, as shown by M. Ansiaux in his article on “Les prix solidaires” (Revue de I Institut de Sociologie), Vol. II, No. 2, March 1920. See also ‘“I'raité d’économie politique,” by the same author, and T. N. Carver, “Principles of Rural Economics,” p. 163, and Seligman, “Principles of Economics,” p. 253.

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