Modern monetary systems

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Monograph

Identifikator:: 82824166X

URN:: urn:nbn:de:zbw-retromon-66898

Document type:: Monograph

Author:: Liljenstrand, Axel

Title:: Om kredit och vexlar

Place of publication:: Helsingfors

Publisher:: Edlund

Year of publication:: 1880

Scope:: 1 Online-Ressource (226 S.)

Collection:: Economics Books

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114 MODERN MONETARY SYSTEMS during this period by any greater rise in prices than occurred in countries with a constant circulation.! These observations suggest that, with the disappearance of causes such as war, which give rise both to abnormal issues (the financial situation) and to a rise in prices (under-production, exchange, etc.), it is no longer easy to prove that simultaneous variation of these two kinds of phenomena in which the Quantity Theory finds its origin. In any case it will be observed that it is not enough, in order to justify the Quantity Theory and show that it 1s universally applicable, to rely on a few historical coinci- dences; and it no longer appears, as at first sight, to follow quite simply and inevitably from that interplay of supply and demand which is a fact of common experience. We will therefore now attempt to discover the logical basis of this conception, which is at present imperfectly established by the sum total of our observations of a few experienced facts. § 3. The basis of the Quantity Theory; how far it is logically valid. If we are prepared, subject to further analysis, to admit in its most general form the proposition contained in the Quantity Theory, and if we hold it to be gener- ally justified in extreme cases, we shall in particular note that any considerable and persistent price movement connoting an equally considerable and lasting change in the circulation should be assumed to be connected with that change and that the latter should be considered a factor, and perhaps a predominant factor, in the price movement. But many authors go further than this; in the first place, they state that the quantity of money will neces- 1 See above, p. 93. M. Aftalion, in the article already cited, points out that in Poland, also, prices remained at about the same level from October 1921 to January 1922, in spite of a considerable increase in the note issue (183 to 227) and at a time when the exchange was almost stable.

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