... University Press Gustav Cassel’s early purchasing-power-parity theory: a note Michael Michaely I The PPP theory, prominent in the 1920s (and, of course, with very long roots in the past), had been largely ignored until quite recently.’ In the last few...

... Economy 14:2 0 1982 by Duke University Press The purchasing-power-parity theory of Gerrard de Malynes Lawrence H. Officer Thanks to the pioneering discoveries and translations of Grice- Hutchinson (1952; 1978), it is now known...

... . A Monetary General Equilibrium Theory for an International Economy . Oslo. Michaely , Michael 1982 . “Gustav Cassel's Early Purchasing-Power-Parity Theory: A Note.” History of Political Economy 14 , no. 2 ( 1982 ). Pigou , A. C. 1922 . “The Foreign Exchanges.” Quarterly Journal...

... Jacob A. Frenkel Michaely’s preceding note (HOPE 14:242) deals with two issues. The first concerns the role of money versus prices in Cassel’s purchasing power parity (PPP) theory. The second issue concerns the distinction between ‘relative’ and ‘absolute’ versions of the PPP theory...

... monetary approach to exchange rates purchasing power parity Graham effect Bretton Woods Aliber, R. Z. 1987 . Exchange Rates. In The New Palgrave: A Dictionary of Economics , edited by J. Eatwell, M. Milgate, and P. Newman, 2 : 210 -12. London: Macmillan. Bordo, M. D. 1993 . The Bretton...

... of the model related to purchasing power parity is a routine one—that the law of one price obtains. I consider in section 3 a model that explicitly allows for short-run variations in local price levels, in this case. It is only within such a model, according to O’Brien...

... parity of purchasing power, is a milestone in monetary thought. Finally, it may be mentioned that they introduced a subtle portfolio anal- ysis of exchange rates that is very modern in outlook. I view the arbitristas as forerunners of what today could be called de- velopment economists...

... of his day, namely, Irving Fisher with his version of the quantity theory of money and Gustav Cassel with his theory of purchasing power parity. Second, precisely because he was striking off in a new direction, Young could not see very clearly the road ahead and was hesitant to commit himself...

... and ap- plied the “purchasing-power parity” doctrine, drove the issue squarely home. Its focus on the macroeconomics of the problem-the clear-cut dependence of the rate of exchange on comparative price levels- shoved the stabilization issue to a relevant, but rather narrow, track. In spite...

...) ‘The monetary approach to exchange rates: its historical evolution and role in policy debates,’ (4) ‘The purchasing-power-parity doctrine,’ (5) ‘On cost-push theories of inflation in the pre-war monetary literature,’ (6) ‘The interest cost-push controversy,’ and (7) ‘Changing views on the Phillips...

... as a solution to the potential conflict between policy targets. Under classical monetary theory purchasing power parity will hold in the long run, but in the short run there will be exchange rate volatility due to speculation, movements of funds, seasonal factors, and inflationary expectations—hence...

..., the morphology of the market, the integra- tion of monetary theory in the general theory of price, the quantity theory of 396 History of Political Economy 2 I :2 (I989) money, and the theory of the purchasing power parity of money (sic, meaning the theory of foreign exchange mentioned above...

... because it enlarges the purchasing power at the disposal of the latter rests on the inconsistent assumption that commercial debts (nominal prices) are redenominated in accordance with the higher mint-parity whereas financial debts are not. Five, Steuart’s view that a debasement transfers wealth...

..., 123). Thus anyone who purchased bills of exchange in Naples and then pur- chased bills of exchange on Naples abroad could rely on a minimum guaranteed gain, even at legal parity. This applied equally to anyone who purchased bills of exchange abroad...

.... This is, of course, very different from Cassel’s purchasing-power parity doctrine, which was criticized by Wicksell (see Tropeano 1989, 216-20). A sponta- neous appreciation of the exchange rate works as a premium upon imports and as an obstacle to exports, so that the domestic price level is “directly...

... by Duke University Press 2023 Warren Nutter Soviet Union economic growth industrial production narrative References Balassa , B. 1964 . “ The Purchasing Power Parity Doctrine: A Reappraisal .” Journal of Political Economy 72 , no. 6 : 584 – 96 . Berliner , Joseph S...

... is the price level—expressed as dollars per basket of goods—then, it follows that:14 G (1) Pt = Et P t 13. Goldsborough presented a second bill in 1924. 14. This is a specific version of the purchasing power parity proposition and assumes a uni- tary pass-through...

...’ excellent presentation of the purchasing-power-parity theory in the Tract is supported by charts and diagrams showing the generally corresponding movements of the actual exchange rates of England, France, and Italy with those re- spectively predicted by the theory (Tract, pp. 81-86). Similarly...

...” (186–89). Cesarano / Keynes’s Revindication of Classical Monetary Theory 497 issue and gold is severed and the basic rule governing the monetary sys- tem is turned upside down: instead of maintaining parity, the monetary authority must stabilize purchasing power. Despite its...

... in balance of payments with the rest of the world would be achieved by freely fluctuating exchange rates which would tend to establish a kind of purchasing power parity among currencies. Interna- tional flows of gold and the consequent inflationary and deflationary pressures on nationai...