TLDR
Since, subject to the qualification of Chapter III., the rate of exchange of a country’s currency with the currency of the rest of the world (assuming for the sake of simplicity that there is only one external currency) depends on the relation between the internal price level and the external price level, it follows that the exchange cannot be stable unless both internal and external price levels remain stable. If, therefore, the external price level lies outside our control, we must submit either to our own internal price level or to our exchange being pulled about by external influences. If the external price level is unstable, we cannot keep both our own price level and our exchanges stable. And we are compelled to choose.via the TL;DR App
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Written by jmkeynes | Creator of Keynesian. English economist whose ideas fundamentally changed the theory and practice of macroeconomics
