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

CURRENCY AND PRICE MOVEMENTS 103 It should, however, be added that when a really general price movement takes place, i.e., one which involves nearly all commodities, and is also continuous and exten- sive, it is reasonable to seek some cause which is also general, and may result, in the event of a rise, in a general increase in purchase prices, due to an increase in the volume of currency in circulation, or in selling prices, due to a decline in production. And so, even on the hypothesis of a general, wide and continuous price movement, and still admitting the principle of the Quantity Theory, we ought not to exclude, a priori, the factor of commodity; but it seems that we should be particularly justified in taking into account the monetary factor. § 2. The Quantity Theory in History. Moreover, some historical facts seem to bear out this hypothesis. We may mention the rise in prices in the 16th century, which, even then, was attributed by some contemporaries to an enormous influx of precious metals.1 ! In addition to various works by Levasseur, de Foville, and D’Avenel and G. Wiebe, Zur Geschichte der Preisrevolution des XV Iten und XV IT ten Jahrhunderts, a recent thesis on the subject by M. A. Liautey, “La hausse des prix et la lutte contre la cherté en France au XVIeéme siécle,” may be mentioned. In spite of these interesting contributions to the subject it is difficult to measure price fluctuations during this period with any degree of accuracy. The rise seems to have begun to make itself felt before the main influx of precious metals began and continued after their production had declined; but the steepest rise seems to have occurred in the third quarter of the 16th century at the time when the increase in the world stock of metal was most marked. This explains Jean Bodin’s theory of cause and effect, which fits in so well with the doctrines ordinarily held that it has been accepted as decisive. The attention of most contemporary observers, however, seems to have been drawn to other factors, and chiefly to the fall in production during a period of war and other dis- turbances, and to the monetary policy adopted during this period. This last point, which is emphasised by M. de Malestroiet, deserves to be noted. In the 16th century, at least in France, the Crown debased the weight and fineness of currencies to a small extent; but it forced up their value, by continually raising the value of a gold or silver coin in livres, so that a smaller and smaller weight of precious metal corresponded to the livre or money of account. M. de Foville has estimated that in this way the livre

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