International trade

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Monograph

Identifikator:: 1758394757

URN:: urn:nbn:de:zbw-retromon-136209

Document type:: Monograph

Author:: Taussig, Frank William http://d-nb.info/gnd/120199459

Title:: International trade

Place of publication:: New York, NY

Publisher:: Macmillan

Year of publication:: 1927

Scope:: XXI, 425 Seiten; graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Problems of verification

Collection:: Economics Books

198 INTERNATIONAL TRADE I {at EY in terms of money. In the ordinary course of affairs there is no conscious exchange of goods for goods. There are sales of goods, or payments for services which are liquidated in terms of money. Money, current funds, what the business man regards as cash, must be remitted from country to country. The illustrative figures presented in the first Part of this volume were worked out in terms of prices, and then in terms of money incomes, with the express object of directing attention to the details of the process by which eventual results were brought about. It is obvious that everything in the calculations rests on the assumption that the flow of specie affects the prices and money incomes of the trading countries. An inflow of specie causes prices and money wages to rise; an outflow causes them to fall. The whole train of reasoning rests, in this way, on the assumption of the quantity theory of money. I say “in this way,” because the quantity theory, when formu- lated in strict consistency with the premises from which it starts, involves something more than the mere proposition that an increase of the money supply raises prices, a decrease lowers them. Stated with logical accuracy, it involves the further proposition that the changes in prices are precisely in accord with the changes in the quantity of money: that prices double (the quantity of goods remaining the same) if money is doubled in quantity, are halved if the money is halved. As regards the mechanism of international trade, however, it makes no difference whether this precise formu- lation of the doctrine be accepted. It suffices if the course of prices and incomes be influenced merely in the stated direction. If an inflow of specie into a country causes prices and wages to rise, the consequences envisaged by the theory of international trade take place irrespective of the exact degree of correspondence between the two movements. It is not of importance for our inquiry whether there be adherence to the semi-mathematical and rigorously consistent formulation of the quantity doctrine. In another regard, however, it is of great importance for the theory of international trade whether the relation between money movements and the level of prices be stated in a guarded or a loose way. Stated guardedly, the quantity doctrine examines the rela-

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