The Mechanism of International Payments: Fixed and Free Exchange Rates
In ‘The Control of Inflation’1 I deliberately avoided any reference to external relations. In discussing the control of inflation I proceeded as if there were but one central authority, one banking system and one note issue and discussed how, in those circumstances, the volume of expenditure might be kept in check. In this lecture I want to bring into the limelight just those relationships and problems which that earlier discussion left out. That is to say, I want to discuss financial relations between different areas, having different central authorities, different banking systems and different note issues. I want to review in a very broad way alternative methods of maintaining financial equilibrium between such areas and some of the implications for general economic policy which these different methods involve.
KeywordsCentral Bank International Relation Money Supply Note Issue Money Income
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