Cover Finance & Development
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Finance & Development, June 1965
Author:
International Monetary Fund. External Relations Dept.
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Series:
Finance & Development
Volume/Issue:
Volume 2: Issue 002
Language:
English
Publication Date:
01 Jun 1965
DOI:
https://doi.org/10.5089/9781616352783.022
ISBN:
9781616352783
ISSN:
0015-1947
Pages:
72
Keywords:
FD; F&D; Fund; country; a number of article; bank issues bond; The Fund; gold exchange standard; fund Agreement; a number of country indices; economies paper; Development assistance; Currencies; Gold; Inflation; Africa; Asia and Pacific; Europe; North America; Northern Europe
Legal-disclaimer:
Opinions expressed in articles and other materials are those of the authors; they do not necessarily reflect IMF policy.
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This paper analyzes the effect of rapid inflation on a country’s international position. The paper highlights that when prices and costs in any country rise rapidly, goods produced in the country soon become more expensive than similar goods produced abroad. Unless the exchange rate changes, this encourages imports and discourages exports. As prices in a country rise more rapidly than in the rest of the world, individuals in that country tend to turn from buying these increasingly expensive products of their own industries to the relatively cheaper foreign goods.
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Cover Finance & Development
Finance & Development
ISSN:
0015-1947
Publisher:
International Monetary Fund