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 I. Modern monetary systems and their operation

Collection:: Economics Books

THE MONETARY CRISIS 67 and a negative balance of payments. The elements of this crisis are of a kind already known, and the exchanges, no longer restricted by the gold points, are exposed to all the vicissitudes of speculation, as has already happened many a time. It is only the extent of the depreciation in some countries which is unprecedented ; therefore the present crisis 1s chiefly distinguished because its effects are so far-reaching. The connection particularly between ex- change and price movements has long been known, but there was often a fairly long interval between the two occurrences ; in any case, the relation between them had not usually been closely defined.l This relation between price and exchange movements be- comes henceforward one of the main features of the crisis. Even in countries like France, where the loss on exchange has always been fairly small, the accompanying internal rise in prices 2 is certainly one of the most important factors in the monetary crisis and of the various resulting economic disturbances. According as the ratio between internal prices and prices of foreign goods converted into national currency at the current rate of exchange is favourable to export or not, pro- duction will be more or less affected. Again, the dis- tribution of wealth is considerably altered, as wages usually rise and fall more slowly than profits, the higher wage varying less than the lower, unearned incomes remaining constant or nearly so, while most other classes of income increase more or less in proportion to the general rise in prices. It becomes very difficult to make long term con- tracts on account of the variations from one period to another in the purchasing power of the same sum of money. These disturbances become catastrophic in a country where depreciation is continuous and increasing in pace. A certain number of capitalists, e.g., those with unearned ! See Subercaseaux, “Le Papier-monnaie,” p. 208 ¢¢ seq. ? We need only observe here the coincidence of the two phenomena, whatever the chief cause of the rise in prices in any given case may be,— whether it has been traced to the exchange itself, to an increase in the note issue or to a scarcity of commodities,

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