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 II. The explanation of contemporary monetary phenomena and currency theory

Collection:: Economics Books

CURRENCY AND PRICE MOVEMENTS 107 ance between the increase in the currency Sf ee rise in. prices, and that it became more marked in each case as hostilities were prolonged.! Some economist may have thought that this approximate parallel was sufficient: to convince those who were still doubtful ; it would ceftainls be very impressive if it were somewhat more exact and if the war had not itself been capable of causing simul- taneously, but separately, the increase in the currency and the rise in prices. But it is impossible to determine by merely observing this coincidence whether one pheno- menon follows from the other, or whether both are a direct result of the same cause: the existence and duration of a state of war involve frequent recourse to new issues of currency, but may also explain the rise in prices merely by the decline in production of commodities in common use. Moreover, on a closer examination, the following facts emerge. In all the countries under consideration it is true that both an increase in the currency and a rise in prices took place if a comparison is made between the beginning (August 1914) and the end (1919 or 1920). But prices do not always rise just when a large increase in the circulation has taken place. Thus in France during the long period from November 1918 to March 1919, a rapid increase in the paper currency occurred simultaneously with a cessation in the rise of wholesale prices; on the other hand, the enormous rise in wholesale prices which declared itself at the end of 1919 proceeded from November 1919 to July 1920 at a time when the note issue remained almost stationary. Similarly in England, the note issue expanded enormously between the end of 1917 and the end of 1918, but wholesale and retail prices hardly rose at all during this period ; on the other hand, prices rose sharply in December 1919 just at a time when there occurred a temporary contraction of the currency. These facts may no doubt be explained by the observation that the effects of currency expansion on prices do not make themselves 1 See M. Gide, “Les mouvements des prix et leurs causes,” Br. Paris, 1022.

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