Symetallic System or Symmetalism?
FIN 111 MWF 4:30 p
SYMETALLIC SYSTEM or SYMMETALISM
A move from the gold to bimetallic would likely have provided some stability to the price level in the face of fluctuations in the relative price of the anchor. However, a greater stability still could be achieve if prices were tied to a basket of gold and silver rather than to fixed amount of metal, and this was the basis of Marshall’s proposed alternative of Symmetallism.
Under symmetallism, the monetary unit would be defined in terms of gold and silver rather than gold or silver as under bimetallism.
What does symmetallic mean?
Using two metals, esp. a standard of currency based on stabilizing the price of a reserve monetary unit that corresponds to a fixed combination of gold and silver, rather than stabilizing the price of either metal separately.
Important facts about symmetallic standard: * It is a fusion of gold and silver in one coin * Made in specific proportion to one another * Currency would be exchangeable for a combination of gold and silver bullion bars in fixed proportion.
Introduced by Alfred Marshall (1888) to the Gold and Silver Commission to the United Kingdom. He wanted to implement these standard to defeat the “Gresham’s Law”.
STRENGTHS
* The price level would be more stable than it would be under the gold standard because shocks to the individual relative prices of the included commodities would to some extent offset each other. * To enlarge the basket of commodities, fixed in quantities, in which money is defined and against which it is issued.
WEAKNESSES
* Determination of “par” exchange relative to monometallic as well as with bimetallic standards. * Difficulty in determining the value of the metals if minted as
SYMETALLIC SYSTEM or SYMMETALISM
A move from the gold to bimetallic would likely have provided some stability to the price level in the face of fluctuations in the relative price of the anchor. However, a greater stability still could be achieve if prices were tied to a basket of gold and silver rather than to fixed amount of metal, and this was the basis of Marshall’s proposed alternative of Symmetallism.
Under symmetallism, the monetary unit would be defined in terms of gold and silver rather than gold or silver as under bimetallism.
What does symmetallic mean?
Using two metals, esp. a standard of currency based on stabilizing the price of a reserve monetary unit that corresponds to a fixed combination of gold and silver, rather than stabilizing the price of either metal separately.
Important facts about symmetallic standard: * It is a fusion of gold and silver in one coin * Made in specific proportion to one another * Currency would be exchangeable for a combination of gold and silver bullion bars in fixed proportion.
Introduced by Alfred Marshall (1888) to the Gold and Silver Commission to the United Kingdom. He wanted to implement these standard to defeat the “Gresham’s Law”.
STRENGTHS
* The price level would be more stable than it would be under the gold standard because shocks to the individual relative prices of the included commodities would to some extent offset each other. * To enlarge the basket of commodities, fixed in quantities, in which money is defined and against which it is issued.
WEAKNESSES
* Determination of “par” exchange relative to monometallic as well as with bimetallic standards. * Difficulty in determining the value of the metals if minted as