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Krugman focuses on imperfect integration of the world economy, showing how this has become both a cause and effect of exchange rate instability.
Above all, managers are more likely to adopt appropriate courses of action if their performance measurement takes into account the effect of exchange rate changes on operating performance.
Trade finance collapsed in the 1930s, reducing the disruptive effect of exchange rate changes, but Greece's entire economy is closely bound with the EU trade and payment system.
The effect of exchange rate depreciation is to push up domestic inflation, in part because much of India's oil is imported (and world oil prices are in dollars, so depreciation immediately pushes up the domestic price in rupees).
It is not only the intensity of the effect of exchange rate fluctuations on the output that differs, but also the duration of the lags between currency shocks and production inconsistencies.
Excluding price-sensitive petrol sales and the effect of exchange rate movements, they were up 6%.
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But adjusting for the effect of exchange rates, international sales grew 34percentt.
International sales rose 14.4 percent, mostly because of the effect of exchange rates.
However, he also said that it is difficult to measure effect of exchange rates in containing inflation from a technical perspective.
The analyst, Steven Milunovich of Merrill Lynch, cited the effect of exchange rates and a slowing computer services market for reducing his forecast for I.B.M.'s second-quarter revenue growth to 1percentt from 3percentt.
The Swedish-American company, whose products include Genotropin, a human growth hormone, and Detrusitol, a new incontinence drug, said earnings would have risen 5percentt and sales 8percentt were it not for the effect of exchange rates.
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