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 109 and Japan, than in belligerent countries on the continent of Europe. The post-war period may seem to offer more favourable opportunities to examine these two phenomena, although the end of hostilities may account both for the decrease in note issues and for the increase in the production of commodities and hence for the fall in prices. Moreover, the two phenomena of currency contraction and declining prices are only approximately parallel in most countries after 1920. If the price index (wholesale) and the mone- tary circulation (total circulation for the United States, note issue for other countries) are each put at 100 in 1919, a table issued by the League of Nations! shows up to the end of 1922 their respective movements every quarter in about fifteen countries. Now, in almost all, the fall in prices preceded the contraction of the currency— especially in the United States, Great Britain, France, Spain, Sweden, South Africa and Japan. In the last- named country the note issue even went on expanding until the end of 1921, the index reading 1038, whereas the fall in prices began in January 1920 and fell from 111, the figure at which the index stood on that date, to 72:6 in December 1921. These observations will obviously not fit in with the theory that price changes are connected with changes in the monetary circulation, and that deflation is the cause and necessary pre-requisite of a fall in prices. And so one author, who has hitherto firmly held that the Quantity Theory comes into play like a piece of automatic machin- ery, has himself explicitly admitted that, particularly in England and the United States, the essential factor in a fall in prices is not a contraction of currency but a con- traction of credit and the resulting crisis. He thus sees in currency contraction, not the cause but the effect of the fall in prices.2 Again, it should be observed that although there may have occurred simultaneously during the period imme- ! “Memorandum on Currencies, 191 3-1922,” Geneva, 1922, p. II. * Rist, “La déflation en pratique,” Paris, 1924.

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