Modern monetary systems

Bibliographic data

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

142 MODERN MONETARY SYSTEMS Now it has been seen how in the case of India a blind attachment to the Quantity Theory led to wrong conclu- sions; in the first place the internal fluctuations in purchasing power which, during one period under con- sideration, were not very considerable, did not correspond to changes in the volume of currency; secondly, the exchange problem was, in this case, largely independent of the problem of variations in the internal purchasing power of the currency, for the fluctuations of the Indian exchange were not unrestricted ; it fluctuated within the limits of an unstable silver point which was bound up with the world market of silver. Again certain writers dominated by a confused idea of depreciation attributable to over-expansion, said to be the cause of loss on exchange, have been led in their study of contemporary phenomena to limit their examples, in trying to prove their point, by comparing the curves of exchange and circulation at periods which are favourable to their thesis, and even to eliminate dis- crepancies.} 1 For instance, in a thesis on the exchange crisis in Spain (Mitjaville, Bordeaux, 19o4) the writer presents a table which shows a remarkable harmony between the movements of the circulation and exchange at the end of the 19th century. But on a closer examination of the table which appears to give a continuous series of concordant figures, it will be seen that three years are missing, viz., the years 1895 and 1899, when an im- provement in the exchange coincided with anincrease in the circulation, and the year 1897, when the exchange was at least as high as in 1900 in spite of a smaller circulation. On the whole, the concordances which have been noted in this table may be summarised as follows. For several years the fiduciary circulation rose progressively, as in most other countries, and as long as the loss on exchange increased, this increase follows the expansion of the currency. But the concordance ceases with an improvement in the exchange. Moreover from 1903 onwards the Spanish exchange improved without any contraction of the currency, contrary to the forecasts of the theorists of the classical school, who considered that the only way of restoring the exchange was to reduce the circulation. On the parallel curves of inflation and exchange in Brazil, see the author’s article, “Les derniéres expériences monétaires et la théorie de la dépréciation” (Rev. Econ. Intern., September, 1908). There are discrepancies commonly known to be due to changes in the balance of payments which had been made positive by the grant of foreign loans, and there are similarities which can also be explained by such changes.

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