 Foreign Price Disturbances and the Internal and External Adjustment of a Small Open Economy under Fixed and Flexible Exchange RatesMichihiro Ohyama
Chapter 6 in Structural Adjustment in Developed Open Economies, 1985, pp 158-186 from Palgrave Macmillan Abstract: Abstract In the contemporary world, a national economy is closely integrated with the rest of the world through international trade and investment, to such an extent that it is continually exposed to changing conditions in foreign markets. It could be affected in many ways by disturbances in both the level and the structure of foreign prices. For instance, a decline in the foreign price level is likely to bring about a fall in the domestic price level, causing a reduction in the domestic employment and a deficit on the current account of the balance of payments at least in the short run. Furthermore, if this also involves a change in the foreign price structure, the national economy is forced to undergo structural adjustment processes, both in the short and the medium term. These will impose additional social costs unless resources can be smoothly reallocated from contracting to expanding sectors. Keywords: Exchange Rate; Wage Rate; Exchange Rate Regime; Small Open Economy; Flexible Exchange Rate (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-17919-0_6 Ordering information: This item can be ordered from DOI: 10.1007/978-1-349-17919-0_6 Access Statistics for this chapter More chapters in International Economic Association Series from Palgrave Macmillan |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.