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

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part III. International trade under inconvertible paper

Collection:: Economics Books

348 INTERNATIONAL TRADE RY i A States to Great Britain. The Americans gain in having more of imported British goods at their disposal. The British lose in having less of American goods at their disposal. That which happens — so we reason — under identical monetary standards, happens also under differentiated standards and dislocated ex- changes. And apparently it happens thru a process quite as quick and effective. Time is needed for a readjustment of pro- duction in either case, and there would seem to be no a prior ground for expecting more time in one case than in the other. What now about prices and money incomes in the two coun- tries? And what about the foreign exchanges? Will the eventual outcome here also be the same as that under specie? I think not. In some essential particulars, conditions will be quite reversed. Under specie the level of domestic prices in each country will be changed — lowered in Great Britain, raised in the United States. But with dislocated exchange, the level of domestic prices in each will remain as it was before. Under specie it is the foreign ex- changes that never vary, barring the minor fluctuations within the gold points. Under paper, however, a new and different normal quotation for foreign exchange will be established. Indeed, it cannot be said that there had been, or will be, any “normal” foreign exchange rate under dislocation; and herein our conclu- sion is quite different from that of the older British economists and from that of their modern successors of the purchasing-parity school. Let me now elaborate and substantiate the theoretic conclusions thus summarily laid down. First, as regards prices in the trading countries. Observe that in the contrasts between the two sets of price conditions which were indicated in the preceding paragraphs it was stated that domestic prices remain unchanged in both countries under dis- located exchanges. It is otherwise as regards imported articles. These become permanently cheaper than before in the United States, dearer than before in Great Britain. It is otherwise also, for a period, as regards exported articles. True, the prices of these in the long run will follow the course of domestic articles; they

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