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

INTERNATIONAL PAYMENTS 199 tion between all forms of the circulating medium on the one hand and the volume of goods (or transactions’) on the other. When set forth in this way, and with attentive consideration of the many and complex factors which enter into the determination of the total volume of effective money, the doctrine cannot, in my judgment, be controverted.! But the thing important for the mechanism of international payments, in relation to the theory of international trade, is not the validity of the complex and guarded doctrine. What signifies is a more special and limited proposition, namely, that the specie constituent has a peculiar and determinative effect on the range of prices. The specie which thus is of domi- nant consequence is such as moves freely from country to country in settlement of international balances; in our modern world, primarily gold. Yet gold is but a minor item in the heterogeneous list of things which make up the circulating medium of modern countries — bank notes and government notes, subsidiary coin, above all the great structure of bank credits and bank deposits. (I speak here, needless to say, of countries in which the whole mass rests on a specie basis, still leaving for later consideration the case of inconvertible paper.) This minor constituent, none the less, as it moves from country to country, is supposed to affect prices and wages, to cause changes in the quantities of goods exported and imported, to bring about notable readjustments in the terms of international exchange and in the prosperity of the trading sountries. The questions of the mechanism of international trade, then, become related not so much to the general reasoning of monetary theory as to the reality of the connection of prices with specie movements. They become questions on the one hand of the sensitiveness of prices to specie inflow and outflow, on the other hand of the ultimate domination of prices by these movements. No one can now reason, as Ricardo and Mill did, on the supposition that the circulating medium of a modern country consists exclu- sively of gold, or that an increase or decrease in the gold supply 'T would refer the reader to what I have said on this large subject in my Principles of Economics, 3d edition, Chapter 30.

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