Showing papers in "PSL Quarterly Review in 1954"

The case for flexible exchange rates

Abstract: In the first part of the article the author shows that the double objective of the return to convertibility and the liberalisation of imports cannot be reached unless exchange rates are allowed to move. In the second and third parts he treats the longer run aspect of the problem, giving exhaustive analysis of possible methods of dealing with a deficit in the balance of payments. This is done first by discussing the disadvantages of the various alternative ways that may be adopted under the system of fixed exchange rates, and second by showing that a policy of fluctuating rates is superior to these methods. In the fourth part the suggestion for combining the policy of flexible rates with establishment of stabilisation funds is discussed. In concluding the author points to the possibility of adopting in the early stages a system of “limited flexibility” under which exchange rates would be allowed to fluctuate between limits that were well defined but considerably wider than those which prevail at present. JEL: E42, F31, F32

The development of the Italian economy

Abstract: The Central Institute of Statistics has recently calculated figures for the Italian national income - at factor cost and at market prices - going back as far as 1901. These data provide the basis for an estimate of productivity for Italy from 1901 to 1953. The present article summarises the results of this investigation. According to the author, it appears that since the Second World War the rate of growth of productivity in Italy has once more reached the figure of about 3.5 percent per year. This is the level which characterised the period 1901 to 1925, and must be classed amongst the highest rates of growth to be encountered anywhere in the world.

International currency and reserve plans

Abstract: In occasion of some recent proposals on currency convertibility, the present work discusses and explains an up-to-date concept of “workable convertibility”. A thorough enquire leeds the author to the conclusion that a workable convertibility would not be incompatible with a certain amount of protection and restrictions, but would entail only the elimination of discrimination and more especially of bilateralism with respect to both trade and payments. Accordingly, a system of convertibility thus organised, while indispensable to the maintenance of international competition, would be subject to a major defect in that it would tend to spread “any deflationary pressures arising from an economic depression or from trade restrictions in one of the major trading centres.” To avoid this drawback, the author suggests a system of “collective arrangements giving operational meaning to the interdependence of the various countries’ policies.”

The monetary problems of a dependent economy: the Australian experience 1948-1952

Abstract: The present article considers special monetary problems that are likely to confront dependent economies because of the dominant influence exerted upon them by the behaviour of the balance of payments. The author examines the concrete case of Australia, a country which, he says, offers a particularly good example of an economy which is both economically dependent and highly developed financially. The main purpose of the paper is to assess the extent to which the Commonwealth Bank was successful in promoting “stabilisation” policies from 1948 to 1952. To this aim, the author provides a detailed analysis of the policy followed by the Central Bank and of its effects on the liquidity position of commercial banks. The investigation is also extended, however, to individual sectors of the economy and to various aspects of the money and capital markets, so as to place in proper perspective the effective possibilities and limits of monetary policy in a country such as Australia.

The archives of a fourteenth century merchant and banker: Francesco Di Marco Datini, of Prato

Abstract: The discovery of the archives of Francesco di Marco Datini of Prato - a 14th century Merchant and Banker of international standing - dates back to 1870. The archives, perhaps the largest and most complete collection of mercantile documents of the Middle Ages, gave rise to research work that culminated in 1928 with an important work by Enrico Bensa, which afforded a general view of the Merchant of Prato himself and of the multifarious activities of his Companies. Today, two initiatives are being carried out for utilising the Datini Archives and making them more widely known. First is the publication of the documents edited along modern lines, in a collection of 30 volumes that will facilitate their consultation and use. Second is a special exhibition of the Archives now being arranged at Prato, which will call the attention of the public to the importance and interest of this cultural patrimony. The present article gives account of both of these undertakings, framed in a brief comprehensive account of Datini himself, showing the significance of his papers and of the studies devoted to them.

Italian emigration movements up to 1940

Abstract: The present work, based on statistical and biographical sources, sums up Italian emigration movements up to 1940, illustrating the ups and downs of the expansion of Italian emigration from the beginning of the century down to the outbreak of World War II. The author describes the various phases of the migratory movement, the changes in its direction and in its regional and vocational structure, showing the distribution of the Italian populations living abroad in the years preceding the last war. The survey is completed by a rapid enquiry into the significance that the size and proportions of Italian emigration have had for the economic and demographic growth of Italy herself.

The money supply and the balance of payments in Ceylon

Abstract: The present article devotes particular attention to the problems connected with the functions of the Central Bank in Ceylon and the criteria according to which it should conduct its operations. According to the author, these functions and criteria would need to be remodelled, as compared with the norms of traditional orthodoxy, in order for them to be made adequate to the development requirements of dependent and backwards economies. In his view, the dilemma which, in an underdeveloped economy based on exports, faces those who are responsible for credit policy seems to be impossible to solve along traditional lines. In any case, he observes, “a mechanical anti-inflationary policy during a boom is definitely ill-advised, for it is only during a boom that the internal sector of the economy experiences even a slight increase in employment and activity”.