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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Document type:: Monograph

Structure type:: Chapter

Title:: Part III. International trade under inconvertible paper

Collection:: Economics Books

354 LU INTERNATIONAL TRADE for the United States would show a fall, whereas under specie conditions the same train of influences would cause the same sort of index number to show a rise. In Great Britain, on the other and, a rise in prices would be shown, as against a fall under specie. This apparently anomalous conclusion arises from the fact that in the United States the sum total of physical goods, and so the volume of trade in terms of units of transactions, becomes larger. There are more imported goods than before. More goods are etained for domestic consumption than before, since exports are ess. On the other hand, the total money income is the same as before. There is a larger supply of imported goods; and there are more domestic goods (or services), too, since more of the coun- ry’s labor is given to making them than before. Domestic goods (including those exported) will be unchanged in price, but imported goods will be cheaper. The price level for all goods shows a decline. The people of the United States have the same money incomes as before, but can buy more goods. In other words, they et the gain from the better terms of foreign trade in that concrete orm in which alone any real gain at all can be got: by having more commodities for their labor. And conversely in Great a There, while the total of money incomes is the same as it was before the change in the conditions of foreign trade set in, BE are less in quantity. There are less imported goods, less too of domestic goods. Prices of imported goods are higher. wi the same money incomes, the people of Great Britain will e able to buy fewer goods.! ~ 1 The general train of reasoning followed in the text was developed in a paper which I published in the Quarterly Journal of Economics, May, 1917. In that paper, however, I said (pp. 397-398) that in the United States, in such a case as has been supposed, there would ultimately be a fall in the prices of domestic goods as well as of imported. This proposition appears to me on further reflection un- sound. The accurate solution, 7.e. that based on unrelenting theoretical reasoning, would seem to be that the fall in price is confined to imported goods only, and that it is the lower prices of these alone that lead to the decline in the general price level and to the greater purchasing power of the stable money incomes. bh This solution seems to me to follow from the constancy of total money income, which points to constancy in money wages and in all the money expenses of pro- duction. Individual money prices of domestic goods will remain unchanged, as do the expenses of production. The proportion of the total money income which is spent on purely domestic goods may become greater or less than before, this depend- ing on the elasticities of demand for these goods and for the imported goods.

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