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

380 INTERNATIONAL TRADE lB attaining its object; and it may seem to be indefinitely successful. And yet here also the long-run consequences are not to be evaded. The flow of loans from country to country depends in the end on the relative conditions of capital supply, just as the flow of commodities depends on the relations between prices; and any rates of foreign exchange which do not accommodate themselves to these funda- mental forces cannot be permanently maintained. The gold exchange standard is virtually a case of pegging, and what has been said in the preceding paragraphs applies. Tt differs chiefly in that the process is expected to be carried on for a longer time. The term pegging is commonly applied to the support or regulation of the exchanges for a few months or at most years. The gold exchange standard contemplates the permanent mainte- nance of a fixed rate of exchange, and the conduct of international trade for an indefinite period without the actual use of gold as circulating medium, and with no flow of gold from country to country in the process of adjusting the international balance of payments. Often the design is to keep the ruling rate of exchange at the same point at which it would be if there were the complete gold standard. While the currency of the country which adopts the exchange standard is not made convertible into gold, international trade is to be carried on as if it were. Even tho there be a stock of the metal in the hands of a central bank or government treasury from which in emergency gold may be sent to other countries, no flow of specie is expected to take place in the ordinary settlement of inter- national payments. It is the rate of discount at banks which is expected to serve as the lever for influencing the offerings of bills of exchange, the course of business and prices, and finally, the com- modity exports and imports. The rate of discount, however, is not dependent on a changing stock of gold held by the bank or banks. It is deliberately managed — manipulated, if that word may be used without implication of ill — in order to influence both the rate of exchange and the flow of remittances in such way as to enable the normal specie rate of exchange to be maintained.

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