Whether price and output stabilization schemes for primary commodities are likely to increase or decrease foreign exchange earnings from what they would be otherwise is a question of great importance to countries contemplating the formation of such institutional arrangements. This paper sheds some light on this question and clarifies under what circumstances Ragnar Nurkse's assertion is valid that countries will fail to maximize foreign exchange earnings if they do stabilize prices.
This article is reproduced with the permission of the American Economic Association.
Grubel, H. G.. (1964). Foreign Exchange Earnings and Price Stabilization Schemes. The American Economic Review, 54(4), 378–385.
The American Economic Review
Foreign Exchange Earnings and Price Stabilization Schemes
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