this currency on the money market exceeds the demand. Therefore, its rate of exchange will go down as against the more stable currencies. a trade war. Thus recently the United States has informed Japan that it will not tolerate an invasion of its market Japanese products as a result of th depreciation of the yen. It is going to tell same thing to French, Italian, and British exporters (and in the near future to the Belgian and Dutch ones). West Germany but also for the U.S. (From Portugal the outtiow ol capita went primarily to Brazil.) Paradoxically, such a capital inflow does little to improve the competitive position of the country in question, unless it is invested productively and this results in an improvement of the average productivity of labor.
The rash of currency speculation testifies to a deepening of the crisis of the Common Market and further aggravates 0O0 • Great Britain Denmark, and Ireland) aside. But now we have seen that the French franc in its turn has had to leave the "snake." We may wonder how long it will be before it is the turn of the Belgian franc or the Dutch guilder. In this case, the "rich" member states would be reduced to West Germany alone. All the rest would be "poor relations." Thus, the hope for monetary unity is fading into the far future, unless the situation (and the German political orientation) changes spectacularly in the coming years
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* DECD consumer price index British consumer price index
Effective exchange rate