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 III. Monetary theory and its application in practice

Collection:: Economics Books

216 MODERN MONETARY SYSTEMS observations. But it is necessary to see exactly how far it goes. In the first place when exchange fluctuations do not 0 beyond the gold points they are too small to have any appreciable effect on current commercial transactions and could hardly produce a recoveryin the balance of payments except in so far as they might stimulate arbitration on real estate or Stock Exchange securities or on temporary capital deposits—transactions which do not take place as between all markets but only as between certain large international centres. When such fluctuations go outside the gold points, their effect on the trade balance appears to be much greater. We already know, however, that this effect only takes place in so far as the rise in internal prices does not counterbalance the exporters’ profit on exchange and the importers’ loss on ex- change, in other words, so long as the purchasing power parity has not been restored. Moreover—and this appears to us to be a fact of capital importance—the premium which an exporter obtains through the difference between the cost of production and the price in national currency at which he will sell his bill payable abroad is likely to be divided with the foreign importers. Thereupon the increase of exports by weight can no longer be reflected in a corresponding increase in value. The value of exports may therefore fall below that of imports merely owing to the depreciation of the exchange. Moreover, the whole idea of an automatic equili- brium due to monetary factors presupposes that exchange rates are governed by the balance of payments or even by the trade balance, which, properly speaking, is the real factor taken into account by these theories. But if the balance of payments, i.e., the balance of debts and credits falling due at any given date, does indeed appear to be the determining factor in fixing the rate of exchange so long as the latter remains within the gold points and specula- tion is thus relegated to the background, #is same factor of ten loses its importance when the exchanges are disturbed and are subject to the forecasts, impulses and panics of the wildest speculation. An examination of exchange fluctua- tions since the war will show the importance of this obser-

Access restriction

Copyright

fullscreen: Modern monetary systems

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation