Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch007
A system for ensuring the convertibility of a currency into specified commodities is also, ipso facto, a system for stabilizing the prices of those commodities in terms of the currency in question. This connection is widely ignored in discussions of these two subjects, but it links the two specialised fields of monetary economics and commodity price stabilization tightly together. Unfortunately, despite much work on the topic spanning many decades, almost all such work is made within a single paradigm – that of establishing an international institution to stabilize commodity prices. However, for a number of reasons, no international agreement can achieve more than a very partial solution to this problem: most importantly it cannot directly stabilize more than a single currency, thereby losing the most fundamental benefit of a true solution for all but one of the participating countries. A different approach is therefore needed.
{"title":"The Other Side of Convertibility","authors":"","doi":"10.4018/978-1-7998-8302-9.ch007","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch007","url":null,"abstract":"A system for ensuring the convertibility of a currency into specified commodities is also, ipso facto, a system for stabilizing the prices of those commodities in terms of the currency in question. This connection is widely ignored in discussions of these two subjects, but it links the two specialised fields of monetary economics and commodity price stabilization tightly together. Unfortunately, despite much work on the topic spanning many decades, almost all such work is made within a single paradigm – that of establishing an international institution to stabilize commodity prices. However, for a number of reasons, no international agreement can achieve more than a very partial solution to this problem: most importantly it cannot directly stabilize more than a single currency, thereby losing the most fundamental benefit of a true solution for all but one of the participating countries. A different approach is therefore needed.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129278496","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch016
The Grondona system was sufficiently well-known during the 1950s to be the subject of debate in the British Parliament in 1958, when it was vigorously praised by supporters, as well as in the press. Examples of this support are given in this chapter, which show how those who took the time to study the Grondona system recognized its unique strengths and strongly recommended its adoption by government. Unfortunately, when the British government finally set up a committee in 1976 to consider the problem of commodity price instability, it was chaired by a long-term advocate of the international buffer-stock system advocated by UNCTAD. As Grondona predicted, the result was that the committee's report contained no substantive criticism of his system but merely reiterated the government's existing policy of continuing participation in UNCTAD negotiations – to no effect nearly half a century later.
{"title":"Past Response to Grondona System","authors":"","doi":"10.4018/978-1-7998-8302-9.ch016","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch016","url":null,"abstract":"The Grondona system was sufficiently well-known during the 1950s to be the subject of debate in the British Parliament in 1958, when it was vigorously praised by supporters, as well as in the press. Examples of this support are given in this chapter, which show how those who took the time to study the Grondona system recognized its unique strengths and strongly recommended its adoption by government. Unfortunately, when the British government finally set up a committee in 1976 to consider the problem of commodity price instability, it was chaired by a long-term advocate of the international buffer-stock system advocated by UNCTAD. As Grondona predicted, the result was that the committee's report contained no substantive criticism of his system but merely reiterated the government's existing policy of continuing participation in UNCTAD negotiations – to no effect nearly half a century later.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128099376","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch012
It is an extremely important feature of Grondona's system that, just as any country implementing it would do so independently on a scale appropriate to their economy, many different countries could establish a CRD without any need for coordination and without in any way hindering each other. On the contrary, as the number of CRDs increased, their collective stabilizing influence on commodity markets would increase proportionately. Moreover, the stabilizing influence on their mutual exchange rates would increase more than proportionately as the number of their mutual exchange rates grew. This contrasts sharply with the proposed international system of buffer stocks which could stabilize no more than a single currency and would become increasingly cumbersome as the number of participating countries increased.
{"title":"Multi-National Implementation","authors":"","doi":"10.4018/978-1-7998-8302-9.ch012","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch012","url":null,"abstract":"It is an extremely important feature of Grondona's system that, just as any country implementing it would do so independently on a scale appropriate to their economy, many different countries could establish a CRD without any need for coordination and without in any way hindering each other. On the contrary, as the number of CRDs increased, their collective stabilizing influence on commodity markets would increase proportionately. Moreover, the stabilizing influence on their mutual exchange rates would increase more than proportionately as the number of their mutual exchange rates grew. This contrasts sharply with the proposed international system of buffer stocks which could stabilize no more than a single currency and would become increasingly cumbersome as the number of participating countries increased.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128085322","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch006
The invention of paper money created a major new problem: how to ensure its value. Historically, the most reliable means of preserving and stabilizing the value of paper currency has been for those issuing paper money to guarantee to convert their notes, on demand, into real assets, at a specified rate of exchange. The most common asset used for this has been gold, which has been effective in preserving the value of currency over a century or more, but this has not prevented serious economic fluctuations. Consequently, for more than a century, economists have argued that it would be more effective to make currency convertible on demand into a range of commodities. Unfortunately, efforts to devise a means of achieving this have not succeeded to date.
{"title":"Inescapable Role of Real Currency Convertibility","authors":"","doi":"10.4018/978-1-7998-8302-9.ch006","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch006","url":null,"abstract":"The invention of paper money created a major new problem: how to ensure its value. Historically, the most reliable means of preserving and stabilizing the value of paper currency has been for those issuing paper money to guarantee to convert their notes, on demand, into real assets, at a specified rate of exchange. The most common asset used for this has been gold, which has been effective in preserving the value of currency over a century or more, but this has not prevented serious economic fluctuations. Consequently, for more than a century, economists have argued that it would be more effective to make currency convertible on demand into a range of commodities. Unfortunately, efforts to devise a means of achieving this have not succeeded to date.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"126 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133341193","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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