International trade

Bibliographic data

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

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Problems of verification

Collection:: Economics Books

INTERNATIONAL PAYMENTS 209 The import of goods may readily come at a somewhat later stage than that of specie; since the movement of goods is more sluggish than that of gold. But come it will, and then the inward flow of specie will be followed by a current the other way. Prices cannot continue to advance indefinitely as they may during the first stage. On the contrary, they will tend to be brought back to a level that is in accord with the normal long-run relation between cash basis and credit superstructure. Just as a sustained inflow of specie will in the end push prices upward, so an upward movement of prices, even tho initiated merely thru deposit expansion, cannot persist unless supported by this same force — a sustained inflow of specie. A sustained inflow of specie may of course be induced by other forces. There may be some cause of an extraneous character, acting of itself to make the balance of payments continuously favorable to the country in which expansion has begun. If, for example, the country is in the early stage of large borrowings — if a succession of loans from abroad is in course of being contracted — the proceeds of the loans will provide the means for paying for added imports. While advancing prices will tempt imports, the loans, so long as they continue, enable them to be paid for from year to year. They may even enable still more specie to flow in, and so give support to a still further advance in prices and still further imports. The process may go on crescendo, until at last there is a halt in the lending operations, not unlikely to be sudden, and marked by a financial and industrial crash. During the years of the upswing period, the import of specie into the borrowing country may seem to be due at each several date to the higher prices and the higher money rates to follow these, not precede them. But these higher prices could not be maintained, much less could move still higher, unless the flow of specie came to the rescue, so to speak. And it could not be a supporting factor for the persisting expansion unless there were some other force at work, such as an international loan. Of all this the expe- rience of Canada, to be referred to presently, offers a striking illustration.

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