An Outline of International Price Theories
Index of Subjects
Balance of Payments, 102, 248–9, 288 f.
———items in, see Balance of Trade; Invisible Items
———natural tendency of equilibrium in, 8, 10, 18 n., 97 f., 99, 102, 103, 104, 108, 109 f., 133 n., 151 f., 228, 229, 245, 248 f., 296 f., passim
———disturbances in, see Disturbances, etc.
———mechanism of adjustment of, see Transfer Problem.
———and rate of exchanges, 8, 9, 24, 50, 89, 97–8, 105, 111, 119, 120, 204, 204 n., 240, 247, 248, 280, 319–320
———and international specie movements, 97 f., 104, 109, 116, 118, 141, 206 passim; see Balance of Trade, etc.
———and crisis, 209 ff., 243
Balance of Trade, 17 n., 102, 288
———existence of, denied by Barbon, 53, 73
———natural tendency of equilibrium in, 77, 81, 95 f., 100, 147, passim
———as a criterion to judge foreign trade, 41
———and rate of exchanges, 30, 32, 33, 34, 50, 50 n., 61 n., 71 n. passim
———and international specie movements, 6, 14, 17, 20, 21, 28, 30, 32, 33, 34, 50, 53, 61, 61 n., 67, 72, 77, 90, 95, 117, 118, 207 Passim; see “Selling Dear and Buying Good Cheap”
———effect on employment, in Mun and Misselden, 32; in Forbonnais, 60 f., 60 n.; Cantillon, 68; Harris, 70; see Money and Trade, etc.
Balance of Trade Controversy, 29–35
Balance of Trade School, as a form of mercantilism, 29 ff., 35, 39, 41, 50, 71, 73
Balance of Trade Theory, anticipated by a Mint officer, 17 n.; by Hales, 17
Balance of Trade Theory, formulated by Serra, 29 ff.; Misselden and Mun, 31, 32, 33, 34; Locke, 50; Cantillon, 68
———criticized by Barbon, 53; Hume, 76 ff., 79; Rivière, 81; Mises, 235
Bank of England, 56 n., 84 ff., 129 ff.
———and country banks, 88, 89, 110, 112, 120
Bank Charter Act Controversy, 129–141, 142, 146, 197, 198
Bank Deposits, see Banking; Credit
Banking, 37, 64 f., 65 f., 70, 114 n., 129, 134, 135 n., 141 n., 164, 212 ff., 218 passim; see Credit
Banking Principle, 130, 135 f., 141 n., 151; criticized, 134
———partially found in Law, 58–9, 58 n.; anticipated by Bosanquet, 120–1, 122
———formulated by Tooke and Fullarton, 135–141; Laughlin, 208–9
———attempt to reconcile with currency principle, 145, 146, 147
Banking School, 130, see Banking Principle
Banknotes, 64, 70, 91 ff., 114 n., 131, 134, 135, 135 n., 137, 138, 141 n., 142, 145, 151
———convertibility of, 133, 135, 141 n.
———inconvertible, see Paper Money
———differences between convertible and inconvertible, 87, 96, 103, 105 f., 108, 113, 120 f., 135, 136, 137, 141, 191 n.
———any assignable limit of the issues of, 87, 89, 92 n., 103, 120–1, 122, 130, 131, 132, 133, 134, 135 n., 136, 137, 140, 145 f., 147, 212 ff.; see Currency Principle; Money and Prices, indirect mechanism connecting
Bank Restriction of 1797, 84 n., 84 ff., 101, 111 f.
———controversy concerning, 84, 123, 130, 133 n., 137, 141
Barter Terms of Trade, 182–3
———gross, 183 n.
Barter Terms of Trade, net, 183 n.
———the two limits of, 167, 167 n., 176, 178, 180
———determination of, 153, 163–170, 174 f., 176, 181, 182, 256, 260, 261, 318
———price level and, 69, 70
———relation to transfer, 69 n., 98, 99, 230, 273, 276, 278, 282, 287, 292, 293, 295, 295 n., 296, 297, 298, 300, 300 n.; see Transfer Problem
Benefit from International Trade, Mun’s conception of, 31 ff., 42; in Cary and Pollexfen, 41; Child and Davenant, 42 n., 42–3; Hume, 75; Rivière, 80, 80 n., 82 n.; Smith, 82 n.; Ricardo and his school, 159; Pareto, 159–160; Ohlin, 309; see Barter Terms of Trade.
Borrowing, 58, 74, 91–3, 137, 139, 145, 146, 192, 214, 216 passim
———international, see International Capital Movements
Budgetary Disequilibrium, as a cause of foreign exchange variations, 247 f., 262–3, 263 n., 266
———and purchasing power parity doctrine, 263
Budgetary Equilibrium, as a precedent condition of currency stabilization, 263, 263 n.
Bullionism, as a form of mercantilism, 23 ff., 25, 26, 27, 29, 32, 33, 71
Buying Power, see Consumers’ Expenditure and Consumers’ Income Capital Movements, see International Capital Movements
Cash Balance Doctrine, in Locke, 48, 48 n., 49; Thornton, 91; Senior, 124; Giffen, 214–15; Walras, 216 n.; Marshall, 216, 217; Wicksell, 216 n., 222–3; Mises, 216 n.; Cannan, 216 n.; Pigou, 216 n.; Keynes 216–17 n.; Robertson, 217 n.; Cassel, 217 n.
Cash Reserves, 85, 86, 90, 149, 186, 190, 201, 211, 214, 215, 217 f., 223, 238 f. passim
Catallactic Doctrines of Money, in Locke, 47; Law, 56–57 n.; Cantillon, 65; Ricardo, 112; Senior, 123; Mill, 142; see Quantity Theory of Money Cheques, see Credit
Classical Doctrine of Banking, 134; see Currency Principle
Classical Doctrine of International Price Adjustment, in Hume, 76 f.; Rivière, 81; Bacalan, 81 n.; Smith, 82; Thornton, 96 ff.; Foster, 103 f.; Ricardo, 113 f., 116; Malthus, 117; Senior, 128; Norman, 131; Loyd, 132; Torrens, 133; Tooke and Fullarton, 140–1; Mill, 147 ff.; summary, 151; see Hume’s Law; Classical Doctrine of Transfer
———post-classical developments, in Goschen, 205; Laveleye, 210, 211; Marshall, 220; Taussig, 238–9; Hawtrey, 242 f.
———opposed by Laughlin, 206–8; criticized by Wicksell, 232
Classical Doctrine of International Price Relationships, 8–9; anticipated by mercantilists, 34, 55, 72, 73, 74; advanced by Hume, 75–9; from Smith to Mill, 82–149; post-classical refinements, 186 n., 220 f., 232 ff., 239 ff., 246
———its place in the history of economic thought, 150
———neglected by Cassel, 252; commented by Angell, 304 n.
———relation to the theory of international trade, 178–184
Classical Doctrine of International Trade, 8, 74, 123, 152, 153–184, 246, 301, 304 n., 308
Classical Doctrine of International Value, see Comparative Costs, doctrine of; Reciprocal Demands, doctrine of
Classical Doctrine of Transfer, 10, 272–3; anticipated by Cantillon, 69 n.; formulated by Hume, 77, 109, 110, 152; Thornton, 77 n., 97–8, 100, 122, 274; in Foster, 104; also in Wheatley, 110 n.; in Blake, 111; Malthus, 117, 118, 122, 152, 274; Senior, 128; Longfield, 276 f.; Mill, 149, 152, 276, 277; Taussig, 280, 284 f.; and his extension of the doctrine to the case of paper standard, 280–2; also in Angell, 304 n.; Viner, 283–4; Keynes, 284, 286–7, 288–291; and his departure from the traditional approach, 287–8; restated by Robertson and Pigou, 295 f.
Classical Doctrine of Transfer, the place of foreign exchanges in, see Foreign Exchanges as a mechanism of transfer
———see also Hume’s Law
———criticized by Ricardo, 116, 117, 118, 122; by Cairnes, 198 f.; see Wicksellian Doctrine of Transfer
———reconcilable with Wicksellian doctrine, 295 f., 296–300
Commercial Revolution, 13
Commodities, international qualitative differences in, 2, 114, 115, 127, 127 n., 233 f., 310
———different susceptibility to price changes, 188, 191, 194, 195–6
Commodity Terms of Trade, see Barter Terms of Trade
Comparative Costs, doctrine of, statement of the doctrine, 155–7, 156 n., 157 n., 159–160; applied to more than two goods, 160–1; introduction of costs of conveyance, 175 f.; and labour theory of value, 170
———anticipated by Torrens, 133 n.; in Torrens and Ricardo, 158; in the author of A Letter on the True Principles of Advantageous Exportation, 158 n.; in other economists, 46 n., 155–162 n.; restated by Taussig, 235, 235 n.
———restated in terms of opportunity costs, 161–2, 308
———criticized by Angell, 304 n.
Comparative Statics, 4–5 n., 251, 254
Composite Demand and Supply Curves, see Marshall’s Curves
Confidence, 85, 90, 91 n., 104, 113 n., 121, 133 n., 141 n., 220, 261, 262 f., 264 ff.; see Budgetary Disequilibrium
Consumers’ Expenditure or outlay, 92, 240
———adapted to their income, 95, 99, 100, 228, 292, 293, 296
Consumers’ Income, 3, 9, 92, 124, 140, 189, 261, 305, 306
———and elasticity of demand, 18 n.
———and the value of money, see Income Theory of Money
———as a connecting link between money and prices, see Money and Prices, direct mechanism connecting
———as a part of the mechanism of transfer, see Wicksellian Doctrine of Transfer
Costs, 124, 126, 161, 162, 162 n., 165, 181, 301 passim
———absolute differences in, 157, 157 n., 235
———comparative differences in, 156, 157, 157 n.
———equal differences in, 157 n.
———money, 165, 166 passim
———opportunity, see Opportunity Costs
———of acquisition, 166
Costs of Conveyance, as a factor in international price relationships, 95, 107, 107 n., 114, 115, 143, 183–4, 207, 220, 236 f., 240. 252, 255, 256 n., 258, 310, 311, 314 f., 318 f.
———as a factor in international trade, 10, 154 n., 171, 175–8
———related to foreign exchanges, 127, 254, 255, 256, 258 f., 261
———related to transfer, 231 f., 294, 298, 299
Costs of Obtaining Gold, 115, 128, 129, 143, 147, 194, 196, 215, 226
———and wages, 128, 188; see Seniorian Doctrine, etc.
———and the character of foreign trade, 196
Credit, 42 n., 57, 64, 89, 90 f., 98, 126, 134, 135, 136, 141 n., 142, 144, 145, 145 n., 151, 191 n., 197, 201, 209, 214, 222, 238 passim
———expansion of, 91 ff., 126, 151, 222, 241 ff.; and crises, 243
———any assignable limit of credit expansion? 92 n., 113, 126, 134, 137, 145, 222, 242; see Currency Principle
———contraction of, 85, 90, 132, 151, 209; see Deflation
Crisis, 147, 209, 210, 211, 243, 244
Currency Depreciation, 86, 87, 88, 89, 102, 104, 105 f., 106, 133 n., 185 ff., 201, 247–271 passim; see Debasement of Coins
———and the rate of exchange, 102, 114; see Purchasing Power Parity Doctrine
Currency Principle, 130, 133–5, 135 n., 137 n., 151, 197
———anticipated by Pollexfen, 42 n.; by Thornton, 91 f., 130; by Foster, 103; by other participants in the Bank Restriction Controversy, 130
———advanced by Joplin, 130; Norman, 130 ff.; Loyd, 132; Torrens, 132–3
Currency Principle, opposed by Tooke and Fullarton, 135 ff.; criticized by Cairnes, 197–8
———conceded by Mill, 146
Currency School, see Currency Principle
Debasement of Coins, 15, 22, 86
———and rises of prices, in Hales, 16; Malestroit, 19; Malynes, 26; Vaughan, 35–6; Locke, 51; Smith, 84, 86
———and foreign exchanges, 51, 101
———and specie premium, 84
———and international specie movements, 16, 26
———disproportionate effects of, in Hales, 16; Acquinas and others, 16 n.; Malestroit, 19; Locke, 51; see Forced Savings, doctrine of; denied by Malynes, 26; by Barbon, 52
———see also Currency Depreciation; Inflation; and Raising of Money
Deflation, as a method of correcting disequilibrium, 90, 97 f., 98, 109, 112, 146, 198–9, 242–3, 245, 289 passim
———disadvantages of, 90, 98, 122 f., 199
———as a cause of crisis, 209, 243, 243 n.
Diffusion, internal, 184; see Money and Prices, Money and Trade
———external. 188–9, 196–7, 201; see International Specie Movements; International Price Adjustment
Discoveries of Gold and Silver, 9, 15 ff., 71, 185, 188 n., 246
Disturbances, causes of, in international trade and in international price relationships, 10, 77, 86 f., 96 f., 98, 100, 103, 109, 116, 117, 119, 121, 128, 147–8, 150, 151, 152, 185 ff., 205, 209, 228 f., 232, 234–5, 241, 244 f., 247 f., 267, 272, 290, 291, 319 f., 319 n.
Division of Labour, 156 n., 165
———between nations, 8, 82, 156, 159–160, 306 f.
Domestic Goods, 3, 18, 35, 59, 115, 176, 230, 235, 236–7, 236 n., 239 f., 255, 258, 268 f., 282, 283, 291, 292, 294, 298, 299, 300 n., 311, 312 f., 318
Due Proportion of Money (to the monetary needs of the nation), the doctrine of, in Vaughan, 36; Petty, 36–7; Davenant, 44; North, 45; Locke, 48–9; Cantillon, 68; Harris, 70; Hume, 78; Smith; 83; Boyd, 87; Thornton, 96; Foster, 103; Wheatley, 107, 108; Ricardo, 118; summary, 54, 62, 72, 74, 108, 178; in later writers, 231 passim
Dynamics, 5 n., 260 f.
East India Company, 31, 40, 40 n., 42, 42 n., 43, 46 n.
East India Trade, 30, 33, 40, 41, 42, 42 n., 43, 43 n.
Elastic Circulation, 130, 132, 201, 218, 222, 238 f., 239 ff., 283; see Banking Principle
Elasticity of International Demands, 18, 18 n., 28–9, 34 n., 72 f., 169, 174, 235, 287, 297, 297 n.
Employment, effects of trade on, see Balance of Trade, etc.; International Trade, etc.
———effects of money on, see Money and Trade
English Recoinage Problem (seventeenth century), controversy concerning, 46–54
Equation of Exchange, in Roscher and other earlier writers, 192 n.; Levasseur, 192–3; Walras and others, 193 n.; Kemmerer, 193 n.; Fisher, 193
———algebraic formulation of the cash balance doctrine, 216–17 n.
Equations of Prices, system of, for a closed community, 303, 305 f.
———extended to trading communities, 303–4, 307–8
Equilibrium, tendency towards, 4, 4–5 n., 62 f., 68, 69, 70, 72, 78, 95, 98, 100, 108, 150 f., 151 f., 174 f., passim
Factors of Production, efficiency of, 115, 128 f., 129 n., 143, 156, 180 f., 227, 236, 237 passim
———prices of, 4, 41, 44, 46, 73, 237, 286 f., 305, 307, 309, 313 passim; see International Comparison of Factor Prices
———relative scarcity of, in Sismondi and Longfield, 301, 302–3, 302 n., 303 n.; Ohlin, 292 f., 94, 306–7. 309
Factors of Production, relative positions of prices of different, 3, 138, 302 f., 302–3 n.. 309
Factorial Terms of Trade, 69, 182, 182 n., 183 n., 184, 196 n., 293 passim; see International Comparison of Factor Prices
———related to barter terms of trade, 182–3
———related to transfer, 69 n., 275, 276, 286 f.
Financial Centre, 243 n.
Flight of Capital, see International Short-Term Capital Movements
Forced Liquidation of Stocks, 243–4
Forced Savings, doctrine of, in Bentham, 94 n.; Thornton, 94; Malthus, 118 n.; Stewart, 118 n.; J. S. Mill, 144 n.; Walras, 224 n.; Wicksell, 223–4; Mises, Pigou, Robertson, Keynes, and Hayek, 224 n.; see Debasement of Coins, etc.
Foreign Exchanges, 1, 2, 4, 22, 23, 71, 85 ff., 101, 102 ff., 107, 111, 127 f., 131, 247, 255, 307 f. passim
———real exchanges and nominal exchanges. 111, 143, 204
———determination of, 8, 24, 30, 32–3, 50 n., 61 n., 74, 87, 111, 204, 240–1, 249, 255 f., 307; see International Comparison of Values of Money
———equation of, 180, 182, 184, 317–19
———par of, 26, 32, 33, 61 n., 108, 111, 122 f., 126, 131, 147, 150, 256 n.
———kept within specie points, 256 n.; see Specie Points
———two forms of the theory of, 250
———balance of payments theory, 247 ff.; see Balance of Payments, etc.
———balance of trade and, see Balance of Trade, etc.
———confidence and, see Confidence; Budgetary Disequilibrium
———interest and, see Interest, etc.
———money and, see Purchasing Power Parity Doctrine
———dynamics of, 260 ff.
———and international trade, 6, 23, 24, 24–5 n., 26, 34, 77, 78, 88, 107, 111, 171, 268 ff.
———and international specie movements, 6, 23, 25, 26, 27, 28, 29, 30, 32, 53, 71, 108 passim
Foreign Exchanges and prices, 23, 25, 27, 33, 266, 268–270, 271 n.
———as a mechanism of transfer, in Hume, 77, 78; in Thornton, 96–7 n.; Foster, 102 f., 122; Wheatley, 107 f.; Blake, 111; Mill, 149; Hawtrey, 244 f.; summary, 152; conceded by Ricardo, 119
———control of, 23–4
———forward exchanges, 204, 204 n.
Foreign Exchanges Controversy, 14, 22–5, 30
———the second, see Balance of Trade Controversy
———the post-War, 247–271
Foreign Exchanges Depreciation, 8, 9, 22, 85 ff., 247–271; see Specie Premium
———as a measure of currency depreciation, 86, 102, 105, 113
———causes of, see Disturbances, etc.
Foreign Trade, see International Trade
Free Coinage, 52 n.
Free Trade. 7, 32, 40, 43, 44, 46 n., 73, 81, 81 n., 82, 149, 150
Freights, see Costs of Conveyance
General Equilibrium Theory, see Mutual Interdependence Theory
Geometrical Means, 201
Gold and Silver, see Precious Metals
Gold Discoveries Controversy, 185–203
Gold Points, see Specie Points Gold Premium, see Specie Premium
Gold Standard, see Metallic Standard Gresham’s Law, 25 n.
Harvests, bad, as a cause of disturbance, 85, 86, 90, 97, 99, 100, 117, 118, 199, 229, 245
Hoarding, 46, 149, 264
———as a remedy of “too much money”, 37, 46, 64, 69, 71
———opposed by paper money mercantilists, 39, 57 ff.
Home Market Goods, see Domestic Goods
Hume’s Law, 78, 96, 98, 103, 104, 109, 116, 122, 128, 130 n., 131, 132, 133, 136, 140 f., 147, 148, 150, 151, 152, 178, 179, 180, 186 n., 197, 206, 207, 210, 211, 220, 232, 238, 280, 304 n.; see also Classical Doctrine of International Price Adjustment; Classical Doctrine of Transfer
Income Theory of Money, in Tooke, 140; Wieser, Hawtrey, and Aftalion, 140 n.
———reconcilable with quantity theory of money, 140 n., 140
Indemnity and Reparation, 10, 272, 279, 279 n., 284, 285, 285 n., 286, 291
Industrial Revolution, 149
Industrial Uses of Money Metals, 124, 125, 206
———relation to monetary use, 46, 91 n., 125
———as a remedy of “too much money”, 37, 46, 54, 71
Inflation, 32, 84 ff.; Ch. VI passim
———three stages of, 264 ff.; mild inflation, 264; severe inflation, 265–6; stage of collapse, 266–7
———see also Debasement of Coins; Raising of Money; Foreign Exchanges Depreciation
Interest, market and equilibrium rates of, 92, 103, 113, 137, 138, 139, 146 f., 190, 191, 218, 221, 222, 289 f.
———affected by monetary changes, 185, 186, 190, 190 n., 191 n., 191–2, 203; see Borrowing
———forced down by law, 41 f., 44
———as a connecting link between money and prices, see Money and Prices, indirect mechanism connecting
———as a regulator of international specie movement by influencing the rate of foreign lending, see International Short-Term Capital Movements
———effects of changes of, on borrowing, 92, 139, 146, 147, 192, 212 ff., passim
———effects of changes of, on prices, 9, 138, 217 f., 222
———effects of changes of, on rates of exchanges, 205
———effects of changes of, on trade, 190 f., 209, 217 f.; on balance of trade, 41 f., 44, 46, 68 n., 291
International Capital Movements, 10, 17 n., 37, 50, 67, 99, 117, 208, 230, 231, 241 n., 248, 272, 273, 280 ff., 282 n., 284, 287, 291, 293 f.
International Commodity Movements, 1, 116, 133 n., 153, 155 ff., 179 f., 306, 309 n.
International Commodity Movements, related to international factor movements, 316
International Comparison of Factor Prices, 1, 3, 41, 44, 73, 107, 128–9, 129 n., 150, 180–2, 184, 226, 236, 241, 253, 302 f., 309, 310, 316; fundamental principles of, 181, 182, 309, 317, 319
———the two limits of variations, 179–181, 184
———relation with barter terms of trade, 179–182, 184, 236, 318
International Comparison of Price Changes and Their Directions, 227, 228, 242 f., 245 n., 320
International Comparison of Price Levels, 2–3; the theory of Malynes, 27; of Misselden, 32; Mun, 33; Montanari, 37 n.; Locke, 49; Vanderlint, 63; Cantillon, 69; Ricardo, 114, 115; Senior, 129; Norman, 130 f.; Mill, 143, 147; classical theory summarized, 150, 179, 183–4, 317, 319; later developments in Cairnes, 196 n.; in Marshall, 220–1; Taussig, 237; Hawtrey, 240, 241; Keynes, 290 f.; modified by Wicksell, 226–8; the theory of Ohlin, 315
———the doctrine of international equalization of price levels, in Wheatley, 106 f.; Laughlin, 207; Cassel, 250, 251–2; corrected by Pigou, 254 f.; by Viner, 256, 257 n.; Heckscher, 256 ff.
———exchanges depreciation and, 268 ff.; see Purchasing Power Parity Doctrine
International Comparison of Product Prices, 3, 95, 106, 107, 114, 115, 150, 183, 226, 230, 231, 239–240, 255, 258, 259, 303, 304 n., 309, 311 f., 311–12, 313 f., 314, 317
International Comparison of Values of Moneys, 1–2, 32, 49 n., 53, 59, 73, 95, 103, 108, 111, 114, 115, 116, 117, 126–8, 130–1, 147, 150, 230, 233, 234, 246, 250, 317–19; see Purchasing Power Parity Doctrine
International Demands, nature of, 173–4; elasticity of; see Elasticity of International Demands
———Law of Equation of, 167; see Reciprocal Demands, doctrine of,
International Demands as a cause of disturbance, see Disturbances, etc.
———effects of monetary changes on, 260
———relation to international value, 163, 164, 165, 168 f., 173 f., 176, 178, 181, 235, 256, 307; see Terms of Trade
———relation to transfer, 99, 100, 109 f., 117, 119, 229, 230, 273 f., 275, 277 n., 286, 291, 296, 298, 299, 300 n.; see Wicksellian Doctrine
———relation to foreign exchanges, 117, 253, 254, 256 f., 259
International Division of Labour, see Division of Labour
International Economic Solidarity, in North, 44 f.; Hume, 75, 77; Physiocrats, 80; Balacan, 81 n.; Smith, 82
International Mobility of Labour and Capital, 50 n., 57 n., 154, 154 n., 155, 165, 166, 309 n., 315, 316
International Price Adjustment, 8–9, 87, 185, 196, 197, 207, 320; see Foreign Exchanges; Transfer Problem
———classical doctrine of, see Classical Doctrine, etc.
International Price Relationships, the theory of, 1, 5, 6, 11–12
———four major problems in, 1–4, 317
———mercantilistic doctrines, 6–7; in Hales, 18; in Bodin, 21; Bullionists, 23; Malynes, 27; Mun, 33 f., 54; North’s contribution, 44 f.; up to 1680, 54; from 1680 to 1750, 54–6; summary, 71–4; see Bullionism; Malynesian Doctrine; Semi-Equilibrium Doctrine; see also Money and Trade for the doctrine that money stimulates trade
———classical doctrine, see Classical Doctrine, etc.
———Ohlin’s theory, 309 ff.
———how to improve on the theory, 321
———Knapp’s doctrine that there did not exist any relationship in the prices of trading countries, 248
International Short-Term Capital Movements, 248; as an item in balance of payments, 249; noticed by Bodin, 20, 203; by Locke, 203, 203 n.; by Cantillon, 67
International Short-Term Capital Movements, as a mechanism of international price adjustment noticed by Tooke, 140, 141, 152, 204; by Mill, 148, 152, 204; Milner, 204 n.; Macleod and others, 204 n.; described by Goschen, 204, 204 n., 205–6, 246; by Bagehot, 206; Laughlin, 207–8, 246; Laveleye, 209–210, 246; Juglar, 211–12, 246; Wicksell, 221, 222, 246; Heckscher, 260; Keynes, 289–291
———as a cause of disturbance, Mill, 148; Wicksell, 232; Goschen, 205; Cassel, 253; Young and others, 262, 266 n., 304 n.; Keynes, 290
———relation to balance of trade, 205
———relation to business cycles and crises, 209, 211
International Specie Movements, 23, 25, 29–30, 31, 53, 71, 73, 74, 85, 87, 109, 116, 117, 118, 132, 135, 135–6 n., 141 n., 149, 190, 198, 201, 204 n., 207, 209, 211, 222, 231, 242, 289
———effects of the state of money and currency on, see Money and Specie Flow
———effects of variations in the market rate of interest or in international lending on, see International Short-Term Capital Movements
———effects of favourable balance of trade or balance of payments on, see Balance of Payments; Balance of Trade; Transfer Problem
———and foreign exchanges, see Foreign Exchanges
———and prices, see Precious Metals, etc.
———prohibition of, 24, 30 n., 33
International Trade, 1, 13, 14, 21, 26, 33, 40, 41, 42 n., 43, 44, 75 f., 77, 80, 80 n., 81 n., 82 n., 153 ff., 155 n., 157, 306 f. passim
———benefit from, see Benefit from International Trade
———financing of, 22, 32
———policy of, see Free Trade; Protection
International Trade, Theory of grounds for a separate theory, 153–5, 176 ff.
International Trade, Steuart and, 74 n.; a new departure in Ricardo, 74, 123, 152, 153
———classical theory, see Classical Doctrine of International Trade; and the theory of international price relationships, 5, 7–8, 178 ff.
———Sidgwick’s theory, 176 ff.
———mutual interdependence theory, anticipated by Sismondi, 301; by Longfield, 301–3; also by Cournot, 303; by Pareto, 303–4; Barone and Amoroso, 304; advanced by Ohlin, 10, 305–6; by Haberler, 161 f., 304 f.; Yntema, 304 n.; Whale, 304 n.; reconcilable with classical theory, 308
International Value, 163 ff., 167 n.; see Barter Terms of Trade
———classical theory of, see Comparative Costs, doctrine of; Reciprocal Demands, doctrine of
———Marshall’s restatement of the theory of, 170–5
———Senior’s theory of, 165 f.
———Shadwell’s theory of, 168 n.
———Sidgwick’s theory of, 177–8
International Wage Comparison, see International Comparison of Factor Prices
Inter-Regional Trade, 155, 155 n., 305, 305 n.
Invisible Items, invisible imports and exports, 33 n., 67, 248; see International Capital Movements, Indemnity and Reparation, Subsidies
Irish Absenteeism Controversy, 274–7
Irish Currency Problem (1797–1804), 102–6
Joint Production, 10, 161 f., 301 ff., 305 ff., 309 ff., 319
Labour Theory of Value, and the theory of international trade, 161 f., 170
Lags, 79, 133 n., 264 ff., passim
Legal Theory of Money, see Valor-Impositus Theory of Money
Malynesian Doctrine, 14, 28, 34, 49, 54, 71, 72 f., 235
Marshall’s Curves, 170, 172–3, 175
Mercantilism, 6–7, 13–14, 15–74, 75, 76, 77, 78, 81, 82, 83
Metallic Standard, 2, 58, 87, 96, 103, 104, 108. 113, 116, 123, 131, 132, 135, 150, 151, 185, 242, 246, 258 n., 320, passim
“Modern” Theory of Transfer, 99, see Wicksellian Doctrine of Transfer
Monetary Transfer, problem of, in Keynes, 288; in White, 288 n., 297; Ohlin, 294 f.; Iversen, 297
Money, 16, 17, 26 n., 71, 80, 90 f., 113, 131, 134, 135, 136, 142, 233, passim
———the nature of, 15, 45, 45 n., 47, 62 n., 189, 233; see Banknotes, Paper Money; as a circulating medium, 21, 31, 38, 55 n., 60, 189; as an instrument of trade, 76, 83, 189; as a measure of value, 51–2, 91 n.; as a store of value, see Store of Value
———the demand of, 36, 37, 44, 45, 47, 48, 57 f., 64, 72, 83, 94 n., 124 ff., 136, 143, 144, 214, 217, 222–3, 264 f.; see Cash Balance Doctrine, Velocity of Circulation, of money.
———due proportion of, see Due Proportion of Money
———paper, see Paper Money
———increasing the national stock of, 38, 39, 53, 56, 69, 71, 76; see Precious Metals; Paper Money
———maintaining the national stock of, 60; see Precious Metals
———natural distribution of, among trading nations, see Precious Metals, etc.
———the theory of, see Value of Money; as the foundation of “international” theory of money, 5
———the value of, see Value of Money
Money and Balance of Trade, 54, 58, 67–8, 69, 73, 76, 81, 88, 90, 98, 116–17, 118 passim
———mechanism connecting, 67–8, 70, 76 f., 81
Money and Foreign Exchanges, see Purchasing Power Parity Doctrine
———mechanism connecting, 249 n., 250 n., 264
Money and Interest, see Interest
Money and Prices, 6 n., 8, 9, 15, 16, 19, 21, 22, 26, 28, 34, 39, 49, 55, 56, 58, 61, 62 n., 67, 67 n., 70, 71, 72, 73, 77, 81, 86, 87, 89, 94 n., 98, 106, 111 f., 120 f., 136, 137, 144, 147, 151, 185, 186, 187, 188 n., 191, 197, 201, 238, 239, 254, 260 ff.; see Quantity Theory of Money; Debasement of Coins Money and Prices, direct mechanism connecting, in Forbonnais, 61; Cantillon 66–7, 68, 73 f.; Hume, 78–9, 151; Senior, 128, 203; Tooke, 136; Newmarch, 188, 203; Cairnes, 194–5, 203; Leslie, 202; summary of the contributions of the gold discoveries controversy, 246; Laveleye, 210; Wicksell, 224 f.; Hawtrey, 241–2
———indirect mechanism connecting, partially found in Law, 58, 74, 212; in Thornton, 91–3, 94; Foster, 103, 103 n.; Ricardo and his school, 113 f., 122, 212; Tooke, 137; Fullarton, 137 f., 212; Mill, 147; partially found in Stirling, Newmarch, and Levasseur, 203; in Laveleye, 210, 212, 246; Juglar, 211, 246; Sidgwick, 213; Giffen, 213–15, 246; Marshall, 212, 215, 216, 217–19, 246; Wicksell, 221–3, 225, 246; Taussig, 238; Hawtrey, 243 n., 243–4; Keynes, 289–290; questioned by Tooke in his later writings, 138–9; by the Banking School, see Banking Principle; by Laughlin, 208
———the doctrine that prices are not uniformly affected by a change in the volume of money, 188, 191, 193 f., 195–6, 201 f., 203, 260 f.; see Sectional Price Levels
Money and Specie Flow, 76 f., 83, 96, 103, 116, 118, 132 passim; see Precious Metals, natural distribution of; see also Money and Balance of Trade; Prices and Balance of Trade
Money and Trade, the doctrine that money stimulates trade, production, and employment, 7 n., 7, 20 n., 55, 55 n., 56 n., 64, 72; in More, 55 n.; in Mun and Misselden, 32, 55 n.; Potter, 38–9, 38–9 n; Asgill, 56 n.; Law, 56–9; Melon, 59; Forbonnais, 59–61; Montesquieu, 62 n.; Hume, 76, 78, 79; Thornton, 93 f., 94 n., 151; in post-Restriction discussions, 123; Newmarch, 188, 189, 202; Levasseur, 191; Laveleye, 210 f.; Juglar, 211 f.; Keynes, 57 n.; criticized by Wicksell, 223; denied by Wheatley, 106; by Cairnes, 199–200, 202; re-stated, 260; see Forced Savings, doctrine of
Money and Trade, the doctrine that insufficient money leads to a decay of trade, 37 n., 48, 50, 60, 70, 90, 98, 106, 123, 199, 274 f.; see Deflation
———money and international trade, see Money and Balance of Trade
———due proportion between, see Due Proportion of Money
Mutual Interdependence Theory, of pricing, extended to the domain of international trade, 10, 161 f., 301–316
Nation, definition of, 154
Non-Competing Groups, 1, 154
Opportunity Costs, 161, 308
Paper Money, 39, 42 n., 56 n., 58, 59, 83, 86, 87, 88, 89, 94 n., 96, 102, 104, 106, 108, 112–13, 116, 120 f., 131, 132, 136, 144, 150, 151, 244 f., 258 n., 264 ff., 280 ff., 320; see Currency Depreciation; Inflation; Money
Paper Money, Mercantilists, 38, 38 n., 40 n., 51 n., 56 ff., 56, 56 n., 138 n.
Pegging, 23, 247
Physiocrats, 75, 79–81, 82, 83
Precious Metals, 14, 17, 17 n., 31, 51, 53, 67, 71, 80, 91 n., 126, 128–9 n., 131, 135, 140, 143
———increasing the national stock of, 6, 7, 31, 34, 36 n., 41, 50, 54, 60, 62, 67, 71, 77
———preserving the national stock of. 7, 24, 53, 55, 63, 64, 65, 69, 70, 73; see Hoarding; Industrial Uses of Money Metals
———natural distribution of, among trading nations, 45 f., 76 f., 78, 81, 82, 87, 103, 113, 114, 118, 130, 132, 133, 147, 150, 178, 190, 201 f., 220, 221, 231, 232, 233; see Due Proportion of Money
———monetary demand of, 46, 57 n., 124 passim
———industrial demand of, see Industrial Uses of Money Metals
Precious Metals and the volume of money, 26, 28, 90 n., 135, 140–1, 147, 149, 187, 198, 207 n.
———and interest, 185; see Interest
———and prices, 15, 20, 21, 22, 34, 185, 187, 201, 238; see Money and Prices
Price Revolution (of the sixteenth century), 15 f.
———compared with price changes of the nineteenth century, 202
———controversy concerning, 15–21, 25, 26
Prices, 4, 15 ff., 33, 46, 67, 86, 90, 106, 128, 194, 200 f., 219–220, 222 passim
———effects of changes in money, on, see Money and Prices
———in different stages of inflation, 264–7
———as a measure of depreciation, 86
———and balance of trade, 7, 27, 33 f., 41, 43, 54, 62, 68, 70, 71, 72, 73, 77, 81, 98, 149, 198, 207, 241 passim; see “Selling Dear and Buying Good Cheap”; Sectional Price Levels and balance of trade.
———and expansion of credit, 92–3, 137
———good price for agricultural products, 80, 81
———factor, see Factors of Production, prices of
Protection, as a policy of international trade, 17–18, 41, 43, 60 n., 261
Protectionist Controversy, the first, 39–44, 54, 63, 72
Purchasing Power Parity Doctrine, 8, 9, 247; the two forms of, 250 f.
———anticipated by Boyd, 87; stated by Thornton, 89, 96, 96 n.; Foster, 104; Wheatley, 108; Blake, 111; Ricardo, 116; Ricardian school, 122; Mill, 144, 148; contributions of the classical school summarized, 150, 151; found also in Marshall, 220–1, 246; in Mises, 234, 246
———Cassel’s version of, 251–4, 260; corrected by Pigou, 255; by Viner, 256; by Heckscher, 256–260; criticized with reference to the dynamic factors, 260–1
———reconcilable with the balance of payments theory of foreign exchanges, 249
Purchasing Power Parity Doctrine and causal sequence of events, 254, 267
Quantity Theory of Money, 6, 6 n., 20 n., 56 n.; in Copernicus, 21 n., in Spanish writers, 19 n.; in Saxon coinage controversy, 20 n.; in Bodin, 20; in Davanzati, 21; in Montchrétien, 22; Malynes, 26 f., 26–27 n.; Mun, 33; Vaughan, 35; Montanari, 37 n.; Locke, 47 f., 48 n.; Montesquieu, 62 n.; advocates of the semi-equilibrium doctrine, 62; Vanderlint, 63; Cantillon’s version of, 67; and his criticism of, 65; in Harris, 70; contributions of mercantilists summarized, 73; in Hume, 76, 78 f.; not found in Smith, 84; in Boyd, 87; in Thornton, 91, 94 f., 151; in Wheatley, 106; Ricardo, 112; Mill, 142, 143–4, 144 n., 149; Austin, 186; Chevalier, 187; Levasseur, 192–3; participants in the gold discoveries controversy, 202; Marshall, 215; Wicksell, 221; Taussig, 238; Cassel, 251; see Equation of Exchange
———cash balance approach of, see Cash Balance Doctrine
———denied by Hales, 16; by Malestroit, 19; by Barbon, 51 f.; criticized by Potter, 39; by the advocates of the doctrine that money stimulates trade, 55, 58, 72, 73; by Senior, 123; by Newmarch, 187 f.; by Laughlin, 206 f.;
———reconcilable with cost of production theory of the value of money, 65, 126, 142–3, 144 n., 186 n.
Raising of Money, 32, 32 n., 33, 35, 46 f., 50 f., 52, 53 f.
Reciprocal Demands, doctrine of, 163, 165, 166–9; applicable to the case of more than two goods, 169–170; cost of conveyance and, 176
———advanced by Mill, 163 f., 166 ff.; Longfield, 164; Pennington, 164; Torrens, 133 n., 164–5; restated and refined by Marshall, 170 ff.; criticized and modified by Thornton, 169 n.; by Nicholson, 169 n.; by Graham, 169
Reciprocal Demands and foreign exchanges, 256, 259
———and international price comparison, 227–8
———and international wage comparison, 181 ff.
Reflux, Principle of, 136 f., 138 n.; see Banking Principle
Report of the Bullion Committee (1810), 111–12, 120
Report of the Select Committee on Irish Currency and Exchange (1804), 102, 105–6, 112
Saxon Coinage Controversy, 20 n.
Secondary Changes in Data, as a problem of economic dynamics, 260, 264, 267
Sectional Price Levels, defined, 3
———in Hales, 18; in Vaughan, 35–6; in classical economists, 183 f.; in Longfield, 277 n.; in Taussig, 236–8, 281, 282; Viner, 284; Hawtrey, 240–1, 241 n.; Heckscher, 258 f.; Mitchell, 268–9; Subercaseaux, 269; Graham, 269–270; Ohlin, 292, 294, 311 ff.; Wilson, 295 n.; Iversen, 298; Nurkse, 299
———and balance of trade, 270–1, 271 n.
“Selling Dear and Buying Good Cheap,” the doctrine of, 7; in Hales, 18; Malynes, 25, 26, 27–8; in Locke, 49; opposed by Mun, 33, 34; by others, 41, 43; summary, 54, 71–2; criticism, 18 n., 28
Semi-Equilibrium Doctrine of international price relationships, 55, 56, 62–71, 72, 73
Seniorian Doctrine of international price relationships, 115, 116, 128–9, 133 n., 143, 147, 150, 181, 190, 235–8, 238 n., 309 passim
Sequence of Events, causal, 267
———chronological, 239, 267
———historical, 267
Short-Term Capital Movements, see International Short-Term Capital Movements
Sinews of War, as an argument in favour of accumulation of precious metals, 17, 69, 76, 83 n.
Space, its place in the theory of pricing, 1, 10, 154 n., 155 n., 233; see Cost of Conveyance; Commodities, etc.
Specie Points, the mechanism of, defined, 38 n.; in Petty, 38; Clement, 50 n.; Locke, 50; in later writings, 105, 108. 120, 204, 251 n., 256 n.
Specie Premium, 84, 86, 87, 89, 90, 97, 100, 102, 105, 111, 121, 144
———as a measure of currency depreciation, 86, 87, 102, 105, 113
Speculation, in foreign exchanges market, 6, 23 f., 26, 262, 265, 266, 266 n.
———and interest rate, 139, 216, 219, 220
Statics, 4 n., 257 n.
Store of Value, as a function of money, 17, 83 n.
———the theory of, 17 n., 36 n.
Subsidies, as an item in international balance of payments, 65, 84, 90, 109, 117, 119
Substitution Curves, 162, 162 n., 163 n.
Terms of Trade, see Barter Terms of Trade; Factorial Terms of Trade
Trade, 39, 43, 44, 62 n., 80, 91 ff., 153 ff., 157, 157 n., 305 ff. passim
———the doctrine that all trade is barter, 77, 80–1, 147, 167 n., 178–9
———international, see International Trade
———effects of changes in money on, see Money and Trade
Transfer Problem, 9–10, 53, 69 n., 97–100, 104, 109, 116ff., 149, 151, 247, 250, 272–300; see Classical Doctrine of Transfer; Foreign Exchanges, as a mechanism of transfer; International Short-Term Capital Movements; Monetary Transfer; Wicksellian Doctrine of Transfer
Tributes, 279
Valor-Impositus Theory of Money, 15, 52, 73
Valor-Intrinsecus Theory of Money, 15, 16, 19 passim
Value, determination of, 46, 47, 51, 51 n., 56–7 n., 65, 70, 112, 123, 142, 165, 305 f.; see Prices; Labour Theory of Value
Value, intrinsic and market, in Cantillon, 65; in Smith, 84; Ricardo, 112; Senior, 125; Mill, 143
Value of Money, 15–16, 19, 20, 27, 58 f., 106, 212 f., 233 f. passim
———determining the quantity of money, 124
———determined by the quantity of money, see Quantity Theory of Money
———determined by consumers’ incomes, see Income Theory of Money
———subject to laws regulating values of commodities, see Catallactic Doctrines of Money
———identified with value of money metals, see Valor-Intrinsecus Theory of Money
———cost of production theory of, in Locke, 47; Cantillon, 65; Smith, 83 f.; Ricardo, 112; Senior, 124 ff.; Norman, 130, 131; Torrens, 133; Mill, 142, 144 n., 145 n.; Stirling, 186; Levasseur, 194; Laughlin, 206
———legal theory of, see Valor-Impositus Theory of Money Velocity of Circulation
———of money, in Petty, 36–7; in Potter, 39 n.; Locke, 48; Montanari, 36 n.; Boisguilbert, 62 n.; Cantillon, 65, 65 n., 66; Thornton, 91, 91 n., 151; Ricardo, 113 n.; Mill, 144; Marshall, 215; in other writers, 192, 193, 193 n., passim
Velocity of Circulation
———of money, two approaches to the problem of, 49, 91
———of money, effects of changes in the circulation on, 92, 261, 264, 265, 265 n.
———of money, effects of changes in confidence on, 91 n., 161 ff.
———of goods, 39, 39 n., 192, 193, 193 n., 215
Wages, 41, 44, 60 f., 73, 107, 128, 188, 194 f., 237, 275 f. passim; see Factors of Production, prices of; Factorial Terms of Trade
Wealth, 17, 53, 71, 76, 76 n., 80, 83
Wicksellian Doctrine of Transfer, 10, 95, 99, 273 f.
———first advanced by Thornton, 99–100, 116, 122, 152, 274; found in Wheatley, 109–110, 152, 270; in Ricardo, 116 ff., 122, 152, 274; in McCulloch, 275; Senior, 275 f.; Cairnes, 198–9, 277; Bastable 277–8; Nicholson, 278–9; Wicksell, 228–232, 246, 279, 283; Hawtrey, 245, 245 n.; Hollander, 283; Anderson, 285; Robbins, 273–4; White, 274 n.; Ohlin 291–6; Wilson, 295 n.; Bresciani-Turroni, 295 n.; Yntema, 295 n.; Haberler, 297 f.; Iversen, 297–9; Nurkse, 299 f.
