An Outline of International Price Theories by Chi-Yuen Wu

Author:Chi-Yuen Wu
Language: eng
Format: epub, mobi, pdf
ISBN: 978-1-61016-619-5
Publisher: Ludwig von Mises Institute
Published: 2013-09-05T16:00:00+00:00

The problem was more elaborately worked out by Chevalier.[5] After a careful examination of the conditions of the demand and supply of gold he came to the following conclusion:—

In no direction can a new outlet be seen sufficiently large to absorb the extraordinary production of gold which we are now witnessing, so as to prevent a fall in its value. There is but one way of disposing of these masses of gold, it is by coining them and forcing them into the current of circulation into countries which are already sufficiently provided with a gold currency. This current will absorb them, for it is, so to speak, insatiable; it receives and carries off all that is thrown into it; but the process of absorption and assimilation is on one condition, namely that gold diminishes in value, so that in those transactions where heretofore ten pieces of gold had for example sufficed, eleven, twelve, fifteen, or even more, will be henceforth required. In a word, if gold is to enter into circulation in indefinite quantities, it is by being subjected to the rigorous law of a continually increasing depreciation.[6]

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