Devaluation and Financial Controls in the Multi-Commodity World

  • Akira Takayama
Conference paper
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 147)


There are three purposes in writing this paper. The first is to examine the “dual” relations between devaluation and an autonomous change in the home or the foreign money supply. In this sense it extends the analysis of Kemp [12]. We shall obtain the generalization of some of his results in a much simpler way. The second purpose of this paper is to examine the uniqueness and stability of the steady state under the specie flow mechanism. We shall conclude that the steady state is stable if the devaluation condition is satisfied, which is more or less contradictory to a recent result by Chacholiades ([6], p. 473), but rather recovers the old result by Lerner to which Chacholiades objected. The analysis here thus completely parallels that of Anderson and Takayama [3]. Thirdly , we investigate the effects of devaluation and financial controls on the steady state values of the money and real prices, the nominal and real cash balances of each country and the level of the welfare of each country. This paper thus extends Anderson and Takayama [3] to a many commodity world, where A-T assumes only that there are two traded commodities and non no-traded goods.


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© Springer-Verlag Berlin Heidelberg 1977

Authors and Affiliations

  • Akira Takayama

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