Money

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Monograph

Identifikator:: 1819853969

URN:: urn:nbn:de:zbw-retromon-207464

Document type:: Monograph

Author:: Cannan, Edwin http://d-nb.info/gnd/118666916

Title:: Money

Edition:: 6. ed.

Place of publication:: [London]

Publisher:: King

Year of publication:: 1929

Scope:: XII, 120 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Further elucidations

Collection:: Economics Books

56 MONEY very large in comparison with the annual output, so that it is not surprising that in its case ‘ quantity ” has been used instead of ‘‘ supply.” Given a certain demand, increase of the supply or quantity (whichever is the more appropriate word in the particular case) of any article reduces its value, and currency is no exception. The additional currency is usually given by the producer (or issuer) in exchange for commodities and services, and his coming in as a new and additional buyer of such commodities and services raises the price of these things and diminishes the value of the currency which he is offering in exchange. Whether the currency is gold or paper this is equally true. The gold mine-owners and workers turn their gold into currency and spend it on the things they want. A government involved in a war prints legal tender notes and buys munitions and military service with them. On the return of peace, it is true, it does not itself buy with the currency, but gives it away in doles and subsidies, yet this makes no difference— the spending of the additional currency still takes place, as the recipients buy what they want with it. Even if the new currency is only issued by way of loan, the effect is the same: the borrowers are then the new and additional purchasers. Sometimes it is objected that the demand for money is, unlike that for other commodities, in- exhaustible, so that the issue of additional currency will not cause its value to fall, since the new issue will always be met by an additional demand for currency. But this objection is absolutely unfounded. It arises from neglect of the distinction pointed out by Sidgwick between the kind of “increase of demand ”’ which raises price and the other kind which he calls, very aptly, ‘“ extension of demand.” We often say that the demand for a thing has

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