The Ohlin-Keynes Debate on the German Interwar Reparations Revisited

Kepa Ormazabal

No 6420, IKERLANAK from Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I

Abstract: This paper analyzes the debate between Ohlin and Keynes on the question as to whether Germany was able to make the payments specified in the Dawes Plan. Keynes argued that Germany was able to collect the money but unable to transfer it to the victors because there existed an insurmountable “transfer problem”. Ohlin replied that such a “transfer problem” did not exist and, therefore, that Germany was able to make the payments stipulated by the Dawes Committee. This paper analyzes the positions of the two contenders and argues that the problems are not correctly delimited and that the theoretical bases of the contenders show serious deficiencies. It also brings to light some interesting theoretical and practical paradoxes that neither Keynes nor Ohlin dealt with.

Keywords: transfer problem; price adjustment; income adjustment; German Reparations (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ehu:ikerla:6420

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Dpto. de Fundamentos del Análisis Económico I, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain

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