The idea that an intractable balance of payments deficit could be eliminated with the proverbial stroke of the pen, by simply removing fixed parities and allowing the exchange rate to depreciate to a level at which imports are balanced by exports, could be described as touchingly naïve if its presentation were not so elaborate and oversophisticated. Here we were, struggling hard to export more and import less, submitting to credit squeeze, wage freeze and other unpleasant devices, when all that the Government would have had to do was to follow the advice thrust upon it by a multitude of economists to let sterling find its own level. Our trade would then have balanced and it would not have been necessary to inflict hardships on us.
KeywordsExchange Rate Foreign Trade Trade Balance Full Employment National Currency
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