Foreign exchange rates and internal prices under inconvertible paper currencies

Recent experiences of England, Sweden, and Argentina under inconvertible paper cur encies indicate that popular theories of the relationship between foreign exchange rates and al prices must be qualified. The usual practice of comparing only the absolute move two variables has resulted in a fruitless and insoluble controversy. When com i price movements in gold standard nations are also considered, however, sme funda metal modifications of the theoretical conclusions which are based largely on the war and post-war inconver currency experiences are shown to be necessary. This paper perhaps dicates a means of bringing the major issues into a common market-place for appraisal