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

TO DISCOVER A STABLE STANDARD 189 United States dollar, and which thus permits the payment at a given date of a sum corresponding to a given number of dollars and of the subsequent reimbursement of a sum which may be very different but corresponds to the same number of dollars, is easier to understand than the system which consists of providing at a given moment for the payment of a given sum in depreciated currency such as the mark, and the reimbursement of the same sum mul- tiplied by a coefficient representing the change in its pur- chasing power, i.e., the change which has taken place in average retail prices. Nevertheless this method of setting up contracts figured in gold is less logical for internal transactions because the correcting coefficient, instead of being based directly on variations in the purchasing power of the currency, is, in fact, based on variations in the rate of exchange between this currency and some foreign cur- rency which has remained at gold par. And we have ob- served that the exchange curve and the curve of purchas- ing power do not usually coincide exactly. In cases of rapid depreciation the same method is ap- plied to all kinds of contracts. We have seen that in coun- tries, like Poland, Austria (up to the monetary reform of 1922) and Germany, the commerical world contracted the habit of fixing their prices according to the rate of the dollar and continually changed the tickets on their goods. And so we arrive at the theoretical conception of a curious system under which variations in purchasing power are neutralised by applying to all debts and credits, whether among private persons or as between private per- sons and the State, a coefficient varying according to the date at which they fall due. In practice it will be observed that this adjustment works very unequally according to the character of the obligations. Returns from che sale of goods will change more or less in proportion with the price of those goods if the market is not restricted, and the seller, by increasing his price, may find some compensation for the general decrease in the purchasing power of the currency. He is bound, however, to take into account a possible decline

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