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

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part II. The explanation of contemporary monetary phenomena and currency theory

Collection:: Economics Books

THE THEORY OF EXCHANGE 155 In any case, if it is true that the exchange rate and the purchasing power parity influence each other, it hardly seems possible to hold that irregular rates of exchange can be determined, in the sense of being limited in their fluctuations, by a factor such as the purchasing power parity which is itself constantly being altered by the rate of exchange. It would be a curious limit which shifted with the pheno- menon, the movements of which it is supposed to restrict. Moreover, there are typical instances to show that the purchasing power parity cannot be considered as a factor capable of determining the exchange curve and of bring- ing an exchange back to equilibrium by restoring the balance of payments; it is enough to consider countries like Germany, where the exchange fell indefinitely. No doubt it is possible to give the a priori explanation that it was the issue of notes which rendered possible the unlimited depreciation of the German exchange by alter- ing the purchasing power parity. But it is well known that from the time when price and exchange movements became closely bound up with each other in Germany (in the second half of 1921), the new issues of notes on a large scale took place afer the rise in prices which made it imperative to increase the media of payment; the rate at which the currency increased was so far behind the rate at which prices rose that this increase cannot be con- sidered as anything but an alleviation of the currency contraction arising from the disproportion between the quantity of instruments of payment and the level of prices. And so only the following facts should be remem- bered. Violent exchange fluctuations which cannot be attributed to a change in the ratio between internal and external prices have occurred generally for reasons in no way connected with the state of the balance of pay- ments nor probably with that of the currency. These wide exchange fluctuations have not created the corresponding Rev. Econ. Int. of February 1924) M. Aftalion has clearly shown the decisive influence of exchange movements on internal prices, and demon- strates from several examples (1) that with stable exchanges internal prices may remain stable in spite of inflation, and (2) that prices rise, even without inflation, when the exchanges depreciate.

Access restriction

Copyright

fullscreen: Modern monetary systems

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation