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A Two-Country Model of the Gold Standard

  • Jay H. Levin

Abstract

The objective of this paper is to construct and analyse a two-country short-run model of the gold standard. Wages and prices respond flexibly in both countries; gold flows in reaction to payments imbalance at the mint par exchange rate; and the authorities refrain completely from sterilising these gold movements. The model and two of its variants are similar to one introduced by Metzler in a recently published article, but the conclusions here differ from his in several respects. Moreover, this paper considers two important disturbances not discussed in the Metzler article and extends his coverage of other disturbances.

Keywords

Interest Rate Money Supply Capital Mobility Capital Inflow Foreign Asset 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

  1. [1]
    Meade, J. E., The Balance of Payments, London: Oxford University Press, 1951.Google Scholar
  2. [2]
    Meade, J. E., The Balance of Payments: Mathematical Supplement, London: Oxford University Press, 1951.Google Scholar
  3. [3]
    Metzler, L. A., ‘The Process of International Adjustment under Conditions of Full Employment: A Keynesian View’. in R. E. Caves and H. G. Johnson, eds., Readings in International Economics, Homewood, Illinois: R. D. Irwin, 1968.Google Scholar
  4. [4]
    Mundell, R. A., International Economics, New York: Macmillan, 1968.Google Scholar
  5. [5]
    Mundell, R. A., ‘The International Disequilibrium System’, Kyklos, xiv, (fasc. 2, 1961 ) 154–72.Google Scholar

Copyright information

© Jay H. Levin 1973

Authors and Affiliations

  • Jay H. Levin
    • 1
  1. 1.Wayne State UniversityUSA

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