The Accounting, Formal Definitions and the Assumptions

H. Peter Gray

Chapter 4 in An Aggregate Theory of International Payments Adjustment, 1974, pp 58-80 from Palgrave Macmillan

Abstract: Abstract The main proposition underlying the formal payments-adjustments model is that planned international investment and planned international saving respond to two separate sets of determining variables. While the two flows do interact, there is no dominating force that can be relied upon to establish equality between the two flows with any degree of automaticity, and it is quite possible that a nation will find it either impossible or undesirable to finance any excess of planned investment over planned saving. Thus frequent or continuing policy adjustments may be necessary if a satisfactory international performance is to be achieved. The failure of international investment and international saving to become equal to each other may be due to institutional rigidities, to the ponderousness and inefficiency of such equilibrating mechanisms as do exist or to perverse variability in any exogenous forces. Alternatively the international system may fail to adjust automatically because the authorities in either the deficit or the surplus nation are unwilling to incur the costs of adjustment — measured by the consequent failure to achieve domestic goals — so that any equilibrating mechanism is deliberately counteracted.

Keywords: Current Account; Competitive Ratio; Trade Balance; Tradable Good; Phillips Curve (search for similar items in EconPapers)
Date: 1974
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-01768-3_4

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349017683

DOI: 10.1007/978-1-349-01768-3_4

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().