Exchange rates and national income

Abstract

The devaluations of September 1949 have revived active controversies in the field of international trade theory. In the course of these discussions certain aspects of the problem hitherto but little considered have been focussed and a special emphasis has been placed on the exaggerations in the tendency to make complex realities fit into over-simplified theoretical tenets. The present article, the second of two by the authors, deals with exchange rates and may be considered as fruit of this process of revision. In it the authors attempt to find a theoretical solution which differs from the prevalent line of thought.

JEL: E01, F31