Defining fundamental disequilibrium: Keynes's unheeded contribution

Abstract

The Bretton Woods agreements set up the post‐war monetary order on the basis of fixed exchange rates and autonomous national economic policy. Changes in parity were allowed in the case of fundamental disequilibrium, but this concept was not defined, promoting a lengthy but sterile debate. This paper, after reviewing the main features of the discussion, analyzes Keynes's overlooked contribution, which helps to clarify the issue at stake.

Citation

Cesarano, F. (2003), "Defining fundamental disequilibrium: Keynes's unheeded contribution", Journal of Economic Studies, Vol. 30 No. 5, pp. 474-492. https://doi.org/10.1108/01443580310492790