Page:Stabilizing the dollar, Fisher, 1920.djvu/49

Rh '''8. International Aspects of the Plan'''. The plan does not require concerted action of nations, though concerted action would be desirable (to avoid the inconveniences of fluctuating ratios of exchange). The nations employing the plan would no longer have their monetary standards at the mercy of foreign politics or wars. International trade would not be greatly affected whether one or many nations adopted the plan. The great advantages, especially as to internal trade, enjoyed by any nation first adopting the plan would probably lead soon to its universal adoption.

9. Numerical Illustrations under Various Assumptions. Actual calculations show that it makes surprisingly little difference to the resulting stabilized index number what brassage charge, what frequency of adjustment, and what adjustment of the dollar's weight for each 1% deviation from par of the index number are decided on so long as these are kept within reasonable limits. Nor, with the same proviso, does it make much difference what may be the amount and promptness of the influence which a given adjustment is assumed to exert, nor what may be the tendency of the index number which the stabilization device is designed to overcome.

Thus, if stabilization had been started in 1900 with an adjustment every other month of 1% of the dollar's weight for every 1% of deviation from par of the index number and with a brassage charge of 1%, and if we assume that the influence on the index number is 1% for each 1% of adjustment, and that two thirds of this influence occurs before the next adjustment and the other third before the next following one —