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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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Conclusion

Collection:: Economics Books

230 MODERN MONETARY SYSTEMS very simple hypothesis ; over against a stationary supply it sets a variable demand corresponding directly to the quantity of money brought on the market. It is not possible without important reservations to compare such a market to a whole country in which goods continually appear on the market and where there is no such direct re- lation between changes in the volume of currency and the amount of income and capital thrown on the market. In the first case the disequilibrium between supply and demand is necessary and evident, even in the case of small changes in the volume of currency. In the second case the position is different. For the adjustment of supply to demand is not a priori impossible. It may take place because a swollen stock of currency may circulate more slowly; or, again, production may be stimulated in so far as the agents of production allow, by an increase in the actual monetary circulation. Therefore the Quantity Theory is only applic- able when an increase in the volume of currency is accom- panied by an increase in demand—and this is not always evident a priori—and when the rise in demand exceeds any possible increase in production. The Quantity Theory is obvious in cases where currency has been widely expanded. But it is no longer so in cases where there have been moderate changes in the circulation. It is therefore impossible to construct theories based on the supposition that changes in the volume of currency exercise a continuous action, whatever the quantities in- volved. Although it may be painful to abandon so con- venient a rule, we are convinced that scientific work can lose nothing by giving up ‘‘certainties” which are more real than the facts themselves. Such easy certainties have only served as a basis for approximate or erroneous explana- tions. We have shown that more often than not in cases where the Quantity Theory taken in the abstract no longer gives the desired explanation, the old law of supply and demand, which is at the basis of the Quantity Theory, supplies, on the contrary, a clear and accurate explanation when it is applied to the exact data of the problem. For we have shown that most monetary phenomena are

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