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Balance-of-Payments Theory and the United Kingdom Experience - A. P. Thirlwall

Balance-of-Payments Theory and the United Kingdom Experience


Published: 2nd December 1991
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Contains a statement of the balance-of-payments accounting, and a critical appraisal of balance-of-payments adjustment theory. The book also features chapters on the capital account of the balance-of-payments and on the new theory of exchange rate determination (with discussion of the EMS). There is extensive and extended coverage of the UK's balance of payments position with chapters on the structural and non-price determinants of trade and the balance-of-payments as well as the link between de-industrialization and the balance-of-payments.;Other books by A.P.Thirlwall include "Regional Growth and Unemployment in the United Kingdom", "Keynes and Laissez-Faire" and "Inflation, Saving and Growth in Developing Countries". Heather Gibson is the author of "The Eurocurrency, Domestic Financial Policy and International Instability" and "Economic Integration and Financial Liberalisation: Prospects for Southern Europe".

Part 1 Balance-of-payments accounting and the foreign-exchange market: concepts of the balance of payments; the accounting balance of payments; balance-of-payments equilibrium; more on the concept of equilibrium; the foreign-exchange market; the demand for dollars; the supply of dollars; capital movements and speculation; the forward rate of exchange; types of exchange-rate regime; fixed versus flexible exchange rates; exchange rate reform. Part 2 The capital account of the balance of payments: the components of the capital account; official reserves; special drawing rights; the balancing item; the capital account and the net external wealth of the UK. Part 3 Exchange rate determination: theories of exchange rate determination; purchasing power parity; current balance model; the importance of theories of expectations formation; the Mundell-Fleming model; exchange rate overshooting models; the portfolio model of exchange rate determination; speculatice bubble models of exchange rate determination; exchange rate determination - what have we learnt?; exchange rate systems and policies; fixed versus flexible exchange rates; types of exchange rate regime; controls on capital movements; exchange rate policy in the 1990s. Part 4 The balance of payments and the national economy: the integration of the balance of payments into the nationnal accounts; the conflict between balance-of-payments equilibrium and other objectives of economic policy; income equilibrium in an open economy and the foreign-trade mulitplier; the foreign-trade multiplier relating imports to expenditure; the 'new' foreign-trade multiplier with foreign repercussions; balance-of-payments adjustment; the classical price-specie flow mechanism; the elasticity approach; the absorption approach; the monetary approach. Part 5 The elasticity approach to the balance of payments: the Marshall-Lerner condition derived; devaluation and the response of firms; lags and the J-curve effect; devaluation and inflation; payments imbalance in the World economy; devaluation and the terms of trade; the difficulties of measuring price elasticities. Part 6 The absorption approach to the balance of payments: the direct effect of devaluation on income; the direct effect of devaluation on absorption; the interaction between changes in income and changes in absorption; strengths and dangers of the absorption approach; the monetary aspects of balance-of-payments deficits; domestic credit expansion. Part 7 The monetary approach to the balance of payments. Part 8 Simultaneous internal and external balance: internal and external balance under flexible exchange rates with no capital movements; internal and external balance under fixed exchange rate woth capital movementsl internal and external balance in an IS-LM curve framework; the use of monetary and fiscal policy under alternative exchange-rate regimes; the assignment of policies in the United Kingdom. (part contents).

ISBN: 9780333543115
ISBN-10: 0333543114
Audience: Professional
Format: Hardcover
Language: English
Number Of Pages: 437
Published: 2nd December 1991
Publisher: Palgrave Macmillan
Country of Publication: GB
Dimensions (cm): 21.59 x 13.79  x 4.0
Weight (kg): 0.7
Edition Number: 4
Edition Type: Revised