Overview

fundamental disequilibrium


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The condition of the balance of payments under which the original rules of the International Monetary Fund (IMF) allowed countries to devalue their currencies. The IMF did not produce a formal definition of fundamental disequilibrium but it was widely assumed that it meant severe balance-of-payments problems which could not be cured without devaluation. In the event the rules proved unenforceable.

Subjects: Economics.


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