Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/19052 
Year of Publication: 
2005
Series/Report no.: 
CESifo Working Paper No. 1588
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
In the famous debate between Keynes and Ohlin on the transfer problem, the interaction between non-traded goods and unemployment complicates the analysis considerably. We analyze these issues using four different models to conclude that Keynes's concern regarding the large burden imposed on Germany was justified. Simultaneously, we show that Ohlin's presumption that a transfer does not affect the donor's terms-of-trade either favourably or unfavourably was also justified. Moreover, Ohlin was also right in asserting that a transfer tends to lower the price of non-traded goods for the donor and raise them for the recipient.
JEL: 
B0
O1
F0
Document Type: 
Working Paper
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