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 123 other supply, which are revealed by a “dynamic” study of the problem. Subject to this reserve, it should, however, be pointed out that the latter influence is necessarily limited by the practical possibility of developing methods of production, whereas the artificial stimulation of demand by fiduciary issues may be unlimited; it does not take long to double the volume of paper money ; it would be impossible in the same period to double a country’s production. The Quantity Theory, therefore, appears to be justified in so far as a change in demand may correspond to a change in the circulation and in that it explains a rise in prices which exceeds the limits of a possible increase in pro- duction ; it therefore seems justifiable to use it in explaining a sudden and considerable increase in the volume of money ; and in such cases it seems to square with the facts more often than not. On the other hand, it seems to us equally difficult to prove theoretically or practically by isolating the factors under consideration, when we are dealing with slow and small changes in the circulation. For then it is exceed- ingly difficult to know whether a change in the volume of money corresponds to an equivalent change in demand; moreover, the production and therefore the supply of goods may be stimulated at the same time as demand. It cannot therefore be admitted that the influence of money on prices can be held to operate continuously and con- sistently whatever the scale involved. Small variations in the volume of money are an unknown factor, which in any case 1s negligible, and we believe that the importance which is assigned to it in the explanation of monetary phenomena is illusory: for instance, in Ricardo’s old theory of international trade,! or in more recent theories which attribute variations in the exchanges to small varia- tions in the volume of money, we believe, not only that the quantity hypothesis cannot be proved by the figures, but also that for the reasons given it is not logically sound. ! See B. Nogaro, “Le role de la monnaie dans le commerce international et la théorie quantitative,” thesis Paris, 1904.

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