CONTENTS

A

xx1

PAGES

speculation and the underlying forces, 375. Effects differ according
 as changes in underlying situation are sudden or gradual.
Speculation does not affect the final outcome, 377. Pegging,
its use and its influence, 378. Gold exchange standard virtually
a pegging process, 380. Advantages of pegging. Difficulties
arise when established rate of exchange ceases to correspond with
relative prices and incomes, 381. Do changes in interest rates
permanently modify fundamental factors? Do the advocates
 of gold exchange standards and of managed currencies
neglect the long-run problems? 383.

CHAPTER 29

INFLUENCE OF CHANGES IN THE VOLUME OF PAPER MONEY :

Importance of distinction between progressive depreciation
and stabilized depreciation, 385. Mere expansion of volume of
paper money does not necessarily lead to a bounty on exports,
385. Situation under silver exchange, 386. Export bounty
occurs in countries of paper money only when exchange rises more
than prices, 387. But exchange may rise less than prices and
thereby place a bounty on imports, 387. Duration of any
bounty on exports dependent on conditions of supply for exported
goods, 389. Very great issues of paper introduce a situation to
which the reasoning proper for moderate expansions does not
apply, 390. Depreciation of paper may bring about a flight of
capital, and lead in itself to a bounty on exports, 391.

HE

385-392

CHAPTER 30

SoME EXPERIENCES UNDER Paper MoNEY
Scarcity of pertinent inductive studies, 393. The United
States for the period 1866-1879 presents a case adapted for verification,
 393. Graham's analysis of price movements and international
 trade; the results in accord with theoretical prevision,
397. Danger of oversimplification in the interpretation of
complicated phenomena, 399. No conclusions possible concerning
 ultimate effects, 400. Williams’ analysis of Argentine
trade in 1880-1900. Heavy borrowing was accompanied by
movements of merchandise such as are in accord with theory,
101. Correspondence between quantity of paper and price of
gold, 402. Low premium on gold a check to exports. Qualifications
 in interpreting the Argentine experience, 405.
APPENDIX
INDEX

393-408

409-419
421425