External Equilibrium Theory

Roy Harrod

Chapter 9 in Money, 1969, pp 206-235 from Palgrave Macmillan

Abstract: Abstract The classical view was that the balance of payments adjusted itself under the gold standard in an elegant manner. We may begin by ignoring capital movement and concentrate upon the income account, and particularly on the merchandise part of it. We assume that the income account has to be kept in balance. The arguments relating to this apply also if there is what may be called a normal or ‘ autonomous’ outflow or inflow of capital proceeding, the requirement for the income account then being that it should have a corresponding surplus or deficit.

Keywords: Interest Rate; Monetary Policy; Fiscal Policy; Flexible Exchange Rate; Capital Movement (search for similar items in EconPapers)
Date: 1969
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DOI: 10.1007/978-1-349-15348-0_9

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