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 III. Monetary theory and its application in practice

Collection:: Economics Books

NORMAL EXCHANGES 215 currency; this lowers prices and by stimulating exports restores equilibrium.! The same notion is put forward in a more modern form by emphasising the part played in international exchanges by exchange fluctuations; the depreciation of the national monetary unit in relation to foreign currencies helps to send up the in- ternal price both of imported and exported goods. It therefore restricts imports and stimulates exports and so has a double effect in bringing about equilibrium in inter- national trade and so restoring the exchange. As regards the first of these theories, that of Ricardo, it is not neces- sary to emphasise the loopholes in his argument.? It will be observed that it only applies to the trade balance and that it attributes to sma// fluctuations in the volume of metal currency an effect on the entire monetary circulation and on prices, which is neither demonstrable a priori nor sus- ceptible of proof. As regards the second theory, which has already been examined, it rests on much more accurate 1 This same theory of Ricardo (High Price of Bullion) also claims to account for the distribution of precious metals in the world; as their excess production sends up prices in the producing countries the trade balance of those countries continually shows a deficit and so the precious metals flow to other countries. In the course of an inquiry made locally shortly after the opening up of the gold mines in Western Australia, the author observed that the local rise in prices was from the beginning due to difficulties of transport and to the ease with which a monopoly could be created, and in no way affected the rest of the country. On the contrary, prices in Western Australia were determined by prices at Sidney (see the author’s article “Contribution a une Théorie Réaliste de la Monnaie” in the Revue d’économie politique, 1906). It should be added that Australia, which is a large gold-producing country and has an ample circulation (larger in 1913 per head than the French circulation), had preserved up to the end of the 19th century a much lower price level than that existing in European countries. It is therefore demonstrable that the mechanism of dis- tribution as conceived by Ricardo does not explain the actual distribution of Australian gold. The flow of gold to Europe appears mainly to result from the necessity of paying dividends on European capital and from the difficulty experienced by a new country, which devotes a large part of its productive forces to the exploitation of gold or silver mines, in developing its other export industries sufficiently to meet the debit side of its trade balance otherwise than by the export of precious metal. 2 See on this point the author’s “Le Réle de la Monnaie dans le Com- merce International et la Théorie Quantitative,” thesis, Paris, 1904.

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