Thomas Tooke

Monetary Depreciation definition according to Kemmener

In Monetary depreciations on April 22, 2012 at 9:33 pm

Here is an interesting definition of monetary depreciation by Kemmener written back in 1920:

“There are two kinds of depreciation- specific depreciation and general depreciation. Specific depreciation occurs when one or more kinds of exchange media are issued in such relative excess that they depreciate in terms of the legal standard-money unit. Good examples of specific depreciation are found in the United States greenbacks from 1863 to the end of 1878, and in the notes of the Bank of England during the period of suspension of specie payments from 1797 to 1821. General depreciation occurs when excessive issues of money, or of deposit currency which circulates in the form of checks, result in the depreciation of the legal standard-money unit itself. Examples of general depreciation are found in England during the years immediately following the Australian and Californian gold discoveries and in all gold standard countries from 1896 to 1913. In these cases gold itself depreciated and hte prices of most goods in terms of gold standard money rose. Obviously, general depreciation may exist either with or without specific depreciation.”

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