Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

Zur Frage der Auswirkungen einer Abwertung auf die internationalen Austauschbedingungen

Kurt Rothschild
Weltwirtschaftliches Archiv
Bd. 72 (1954), pp. 225-238
Published by: Springer
Stable URL: http://www.jstor.org/stable/40433460
Page Count: 14
  • Download ($43.95)
  • Cite this Item
Zur Frage der Auswirkungen einer Abwertung auf die internationalen Austauschbedingungen
Preview not available

Abstract

Both in economic theory and economic practice, experts have long held that a currency devaluation necessarily has an adverse effect upon international terms of trade. Research undertaken in pure theory, however, has shown that there is no necessary connection between devaluation and terms of trade, but that the effects of devaluation depend on the relative demand and offer elasticities of import and export goods, and that the terms of trade may either improve or grow worse. It is then shown that an improvement of terms of trade as a result of currency devaluation, though theoretically possible, is not likely to occur in reality. When the devaluation takes place in an area that is small in comparison with the volume of world trade, and under perfectly competitive conditions, the result to be expected is that terms of trade remain very near what they were. But as soon as you drop the unrealistic assumption of perfectly free competition and consider various forms of imperfect and oligopolistic competition, asymmetrical forces will arise and weigh down the export price level (in terms of gold) more than the import price level. It is therefore concluded that, under the conditions actually obtaining, it is on the whole correct to assume that a currency devaluation will react adversely on terms of trade.

Page Thumbnails

  • Thumbnail: Page 
[225]
    [225]
  • Thumbnail: Page 
226
    226
  • Thumbnail: Page 
227
    227
  • Thumbnail: Page 
228
    228
  • Thumbnail: Page 
229
    229
  • Thumbnail: Page 
230
    230
  • Thumbnail: Page 
231
    231
  • Thumbnail: Page 
232
    232
  • Thumbnail: Page 
233
    233
  • Thumbnail: Page 
234
    234
  • Thumbnail: Page 
235
    235
  • Thumbnail: Page 
236
    236
  • Thumbnail: Page 
237
    237
  • Thumbnail: Page 
238
    238