This volume is intended to
provide a survey of thought about exchange-rate determination as it emerged in the decade
of the 1970s. This survey differs from many, however, in that the field itself is in a
state of rapid change. Understanding the changes and the reasons for them is therefore
essential if the reader is to have a basis for understanding future advances in knowledge
and the further evolution of the system. The survey is also intended to reach
non-specialist professional economists whose balance-of-payments theory was learned before
the 1970s, as well as to provide graduate students and advanced undergraduates with an
up-to-date account of the field. In most respects, the theory of exchange-rate
determination is based upon an analytical structure equivalent to that analyzing the
determinants of the balance of payments under fixed exchange rates. The difference is that
the shifts in excess demand for foreign exchange lead to quantity adjustments under fixed
rates and price adjustment under flexible rates. Thus, attention turns first to
exchange-rate, or balance-of-payments, determination. Thereafter formal analyses of
differences and similarities between the functioning of the alternative systems are
considered, reflecting the focus of the profession and the mainstream of research of this
period.
Table of Contents
Preface;
1. Introduction;
2. The field, the questions,
and the concepts;
3. Models of the current
account;
4. Models of the capital
account;
5. Interactions between
current account and capital account;
6. Alternative exchange-rate
systems;
7. Policy effects under
differing macroeconomic specifications;
8. Payments regimes and
developing countries;
References;
Subject index;
Author index.
217 pages