Abstract:
Previous research on the intertemporal approach is based on the standard real model of the balance of trade. This paper outlines a more general model that allows for monetary non-neutrality, and tests the general model against a restricted version that embodies neutrality. While the empirical analysis focuses on the UK trade balance during the Bretton Woods era, the fundamental issues are of interest to more than just students of Bretton Woods. Copyright 1997 by Blackwell Publishing Ltd.