An Integrated Approach

Giancarlo Gandolfo

Chapter 9 in International Finance and Open-Economy Macroeconomics, 2016, pp 161-190 from Springer

Abstract: Abstract In the previous chapters we have separately examined the role of exchange-rate variations (Chap. 7 ) and income changes (Chap. 8 ) in the adjustment process of the balance of payments. An obvious step forward to be taken while remaining in the context of the traditional theory, is to attempt an integration between the two mechanisms in a broader framework in which the adjustment can simultaneously come from both the exchange rate and income. Among these attempts, which contain the germs of the more general theory of internal and external macroeconomic equilibrium (treated in the next chapters), we shall examine that of Laursen and Metzler (Review of Economics and Statistics, 32, 281–299, 1950; reprinted in: L.A. Metzler (1973). Collected papers. Cambridge (MA): Harvard University Press, 275–307); two other attempts worthy of mention are those of Harberger and of Stolper (Quarterly Journal of Economics, 64, 559–582, 1950).

Keywords: Exchange Rate; Equilibrium Point; National Income; Aggregate Demand; Trade Balance (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1007/978-3-662-49862-0_9

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