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 III. Monetary theory and its application in practice

Collection:: Economics Books

184 MODERN MONETARY SYSTEMS units of other countries on a gold currency.! But this does not mean that the exchange value of this monetary unit in relation to all goods and services is nowadays determined by any market rate for gold, since the latter, as we have seen, no longer has a market rate. In the last analysis the idea of a standard comes down to that of the unit of account by which the exchange value of various commodities in relation to the currency, and hence their exchange value among each other, is measured. And this is the meaning which we have in mind when we attempt to find a suitable standard of values. A monetary unit, whether it circulates after being embodied in some form of matter or whether it is used abstractly in some form of accounts, is perfectly adequate as a measure of values at any given moment. One object is worth 10 francs, another 20, another 30; from this observation it follows that the second object is worth twice the first and the third is worth three times the first and one and a half times the second. But it is commonly stated in addition that money is a standard which varies from one period to another ; for the same sum of money does not represent the same quantity of goods at different periods. In this form the observation is perhaps not quite accurate. If a hat which was worth 5 francs before the war is worth 20 francs to-day, the estimate, expressed in monetary units at different periods, exactly expresses the difference in exchange value of the commodity in relation to the currency at these two periods. Units of currency will accurately measure this difference over a lapse of time. The same applies to all commodities and we only have to take the average price level at the two periods under consideration in order to measure exactly any change which has taken place in the exchange value of all commodities in relation to the monetary unit. 1 This stable exchange ratio is not only due to the amount of gold in each monetary unit, but to the fact that owing to free coinage and free export and import the gold currency of one country is convertible ad Libitum in the other. This is shown by the dislocation of exchanges which happens between countries on a gold currency when gold can no longer move freely from one country to another and the currency of one can no longer be freely transformed into that of the other.

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