Wednesday, October 3, 2012


Is there a canonical article/treatment of internal devaluation?

Wikipedia is always a good place to start, but Wikipedia says that nobody really worked on it until 2012 which seems highly implausible to me. Modern treatment, I mean. I know Keynes wrote about it in 1923.


  1. You mean besides Keynes (1925), "The Economic Consequences of Mr. Churchill" and Donald Moggridge, "The Norman Conquest of $4.86"?

    1. It's true... 1925 is more modern than 1923. But I think I'll try Moggridge first :)

      Here is the context - I am writing a short paper on some economic policy views of Martin Luther King. Among them is counter-cyclical fiscal policy and he particularly talks about the role of fiscal policy in addressing problems in ghettos. The way he talks about the problem makes me think about the very existence of ghettos as a sort of internal devaluation. This is not a new way of talking about Southern labor markets, but I think it can be applied a bit more broadly. I'd like to just reference that as another way of thinking about King's views in the paper, but it also makes want to get more familiar with the literature on internal devaluation (particularly if there's a canonical model) and pursue the problem in more detail in the future.


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