Do Exchange Rates Work? Another View

Robert Mundell

No 1991/037, IMF Working Papers from International Monetary Fund

Abstract: This paper investigates the role of exchange rates in balance of payments theories. It explores the sixteen approaches to the balance of payments, the concept of an “equilibrium” trade balance and sequential “stages” of the current account. It examines fiscal and demographic influences on the U.S. deficit. The final section considers the breakdown of the international monetary system after World Wars I and II; an evaluation of alternative proposals to correct the defects of the system; and an examination of the extent to which deficits of reserve countries have their origins in systemic problems.

Keywords: WP; balance of trade; current account; trade deficit; budget deficit; international monetary system; price level; gold standard; pound sterling; paper gold; flexible exchange rate system; excess supply; Trade balance; Exchange rates; Gold; Exchange rate flexibility; Trade deficits; Global; Eastern Europe (search for similar items in EconPapers)
Pages: 58
Date: 1991-04-01
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1991/037

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