Characteristics of the Short-Run Model
The contention that the general equilibrium approach is unsuited to policy prescriptions for payments adjustments in the modern era must be analysed before a short-run theory can be substituted for it as the core of payments theory. The requirements imposed upon the world by general equilibrium theory for it to be operational are considered first and are followed by a brief examination of the support for general equilibrium that can be derived from the twenty-five-years life span of the Bretton Woods era.
KeywordsCurrent Account Competitive Ratio Liquid Asset Capital Movement Bretton Wood System
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