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 zor: mechanism at the present day, whereby the real circulation is largely independent of the stock of metal. It is true, of course, that a heavy flow of currency is likely to stimulate a demand for goods more rapidly than a corresponding development of credit would increase pro- duction, but it is .nuch less true that a decrease of the stock of metal would result in a decrease in the demand for ob- jects of consumption more quickly than in a contraction of credit and of production. In any case, a theory under which the movement of prices is affected by slight and frequent variations in the stock of currency seems to us to have neither a logical basis nor to be capable of proof in view of the large num- ber of external factors which may come into play. It therefore seems to us to be entirely useless to attempt to regulate the monetary standard and even to neutralise the slight variations in prices which are the inevitable result of changes in the production and in the markets of various commodities. On the other hand, experience shows that apart from rare periods of crisis in which the scarcity of production, the increase of monetary instruments or the condition of the exchange may provoke an abnormal rise in prices, variations in prices are small enough as between one period and another in a man’s life for it to be possible, without serious inconvenience, to use money as a standard of deferred payments.1 Starting therefore from a belief which may be rough and ready but which avpears to us to rest on a surer basis, that only very considerable changes in the volume of circulation will pro- duce equally large variations in the purchasing power of cur- rency, we will confine ourselves to the conclusion that the main- tenance of approximate stability in the purchasing power of a currency presupposes the maintenance of the circulation without any great changes at a figure corresponding to the price level Which it is desired to maintain. Moreover, it should be remembered that this is not the only condition for approximate stabilisation, for experience ! Except as we have shown above, in so far as it may be possible to apply a coefficient based on the index of retail prices for long-term contracts.

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