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Example of the country which have run into poverty owing to a liquidity preference,
Turned to such strong passion, what even huge and constant
Inflow of precious metals was insufficiently for decrease in norm of percent
To the level compatible to growth of real riches.
Nevertheless, if we consider company with rather stable
Wages unit, with the known national lines defining
Propensity to consumption and liquidity preference, and a monetary system,
Rigidly connecting quantity of money with a stock of precious metals, in
Such company for maintenance of its prosperity it is essentially important, that
The government paid steadfast attention to a trade balance. Business
In that favorable balance of a trade balance under a condition, if it not
It is too great, extremely stimulates an economy, and an unfavourable balance
Can soon generate long depression.
From this does not follow that the maximum restriction of import will supply
It and often opposed to trade barriers, as in the long
To prospect these restrictions could worsen a trade balance. It is possible even
To assert that in particular covenants of Great Britain of the middle of XIX century almost
The uncontrolled liberty of trade was a policy most promoting development
Favourable balance. Modern practice of trade barriers in the post-war
To Europe it is rich with examples of rash restrictions of freedom of the international
Turn-over, which instead of improving a trade balance, as it
Meant, actually acted in an opposite direction.
On this and for other reasons the reader should not do the premature
Conclusions about the practical policy to whom make our reasons.
There are weighty arguments of the general character against trade barriers, if
Only they are not justified by any exceptional circumstances. Advantages
The international division of labour are real and essential, even if
The classical school has hardly exaggerated them. That fact that a prize of ours
Own country from a favourable balance can mean the respective
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