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The Keynesian Revolution in the Making, 1924–1936$
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Peter Clarke

Print publication date: 1990

Print ISBN-13: 9780198202196

Published to Oxford Scholarship Online: October 2011

DOI: 10.1093/acprof:oso/9780198202196.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 23 July 2021

. Rigid prices and flexible doctrines, II: Free Trade

. Rigid prices and flexible doctrines, II: Free Trade

Chapter:
(p.197) 9. Rigid prices and flexible doctrines, II: Free Trade
Source:
The Keynesian Revolution in the Making, 1924–1936
Author(s):

Peter Clarke

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780198202196.003.0012

Keynes had first made out the case for protection as one of the seven remedies outlined in his private evidence to the Macmillan Committee in February 1930. The modus operandi of Bank rate was again crucial to the analysis, since an outflow of gold would be the immediate result of an excess of imports over exports, thus setting off a chain reaction of compensating adjustments. The virtue of free trade was that in theory it maintained real wages, and thus living standards, even though money wages might be reduced. Keynes's attachment to free trade was more than a pious disclaimer, though he was now determined to reassess the balance of advantage under changed conditions. In September 1931, Britain went off the Gold Standard. With a lower exchange rate, British exports would no longer be uncompetitive and the need to reduce wages would disappear.

Keywords:   gold, free trade, Keynes, Bank rate, Gold Standard, Britain

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