An International Economic System
In: International affairs, Band 31, Heft 2, S. 218-218
ISSN: 1468-2346
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In: International affairs, Band 31, Heft 2, S. 218-218
ISSN: 1468-2346
In: The Economic Journal, Band 64, Heft 256, S. 803
In: Revue économique, Band 6, Heft 5, S. 812
ISSN: 1950-6694
In: The Western political quarterly, Band 10, Heft 4, S. 955
ISSN: 1938-274X
In: Kyklos: international review for social sciences, Band 14, Heft 2, S. 153-172
ISSN: 1467-6435
SUMMARYMost of the important generalizations of international trade theory that owe their origin to the classical school are long‐run and static in nature, implicitly assuming that disequilibrium is a transitory state and that passage between equilibria is untroubled. Yet past experience seems to indicate that external disequilibria can remain for extended periods of time, and that the modern system is a disequilibrium system.The nature of the international disequilibrium system has sometimes been attributed, erroneously, to the Keynesian foreign‐trade‐multiplier theorem that an increase in exports will induce an increase in imports which is smaller than the initial increase in exports, and this has been the origin of the belief that "HUME'S law" is invalid in the case of saving and unemployment. However, HUME'S law is valid even in this case if gold flows are allowed to have their natural effect on the internal money supply and hence on interest rates, investment and incomes. HUME'S law is therefore valid in the case of Keynesian unemployment, although the price‐specie‐flow mechanism is replaced by an income‐specie‐flow process.The true nature of the international disequilibrium system derives from the fact that central banks do not allow externally‐induced gold flows to affect the internal supply of money since that would conflict with the new primary goal of monetary policy; full employmentwithout inflation. The new function of monetary policy leaves a policy vacuum with respect to the balance of payments, except insofar as ad hoc policies are designed to suit special circumstances. Gold flows are therefore automatically neutralized by open market operations in some countries, while in other countries monetary policy in effect cancels or reinforces the monetary effect of gold flows in the pursuit of internal stability.At critical times, when foreign exchange reserves become dangerously low and subject to speculation, or when they become burdensomely high, action by the authorities must be introduced even if this is at the expense of internal stability. Even in these cases, however, the system need not become an equilibrium system since the objective might be to recoup reserves or allow them to run down.
In: Aus Politik und Zeitgeschichte: APuZ, Band 13, Heft 19, S. 11-24
ISSN: 0479-611X
In: The annals of the American Academy of Political and Social Science, S. 101-109
ISSN: 0002-7162
In: The annals of the American Academy of Political and Social Science, Band 246, Heft 1, S. 101-109
ISSN: 1552-3349
In: Foreign affairs, Band 42, S. 107-122
ISSN: 0015-7120
In: International journal / Canadian Institute of International Affairs, Band 10, Heft 4, S. 309-309
ISSN: 2052-465X
In: International affairs, Band 34, Heft 4, S. 497-497
ISSN: 1468-2346
In: The Australian journal of politics and history: AJPH, Band 5, Heft 1, S. 41-50
ISSN: 1467-8497
In: The Australian journal of politics and history: AJPH, Band 5, S. 41-50
ISSN: 0004-9522
In: Foreign affairs: an American quarterly review, Band 42, Heft 1, S. 107
ISSN: 2327-7793
In: The journal of negro education: JNE ;a Howard University quarterly review of issues incident to the education of black people, Band 15, Heft 3, S. 285
ISSN: 2167-6437