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A Theory of International Capital Flows

  • Chapter
The Economics of the Euro-Currency System

Part of the book series: Problems of Economic Integration

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Abstract

In the previous chapter our aim was to gain an appreciation of some of the basic linkages between the euro-currency system and domestic and international financial activities. In the process we touched upon its relationship with foreign-exchange markets, the money supply, international reserves and balance-of-payments positions of those countries involved with the system. However, we did not really discuss in any detail the basic reasons why such a complex international financial structure should have developed in the first place. To rectify this situation we must now return to the two questions which were raised earlier:

  1. (1)

    What factors determine the currency of denomination of assets or liabilities held by individuals, businesses and financial institutions?

  2. (2)

    What factors determine the country where these assets or liabilities are created?

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Further Reading

  • Karl Brunner and Allan Meltzer, ‘The Uses of Money: Money in a Theory of an Exchange Economy’, American Economic Review, 61 (Dec 1971).

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  • Joseph Conard, An Introduction to the Theory of Interest (University of California Press, 1966).

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  • P. Davidson, Money and the Real World (London: Macmillan, 1972).

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  • Irving Fisher, The Theory of Interest (New York: Macmillan, 1930).

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  • J. R. Hicks, ‘Recollections and Documents’, Economica, 40 (Feb 1973).

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  • I. F. Pearce, International Trade (London: Macmillan, 1970).

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  • William Silber, ‘Innovations in the Financial Sector’, Working Paper No. 31, Salomon Brothers Center for the Study of Financial Institutions (Mar 1975).

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References

  1. I. F. Pearce, International Trade (London: Macmillan, 1970).

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  2. P. Davidson, Money and the Real World (London: Macmillan, 1972).

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  3. J. R. Hicks, ‘Recollections and Documents’, Economica, 40 (Feb 1973) pp. 2–11.

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  4. Karl Brunner and Allan Meltzer, ‘The Uses of Money: Money in a Theory of an Exchange Economy’, American Economic Review, 61 (Dec 1971) pp. 784–805.

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  5. William Silber, ‘Innovations in the Financial Sector’, Working Paper No. 31, Salomon Brothers Center for the Study of Financial Institutions (Mar 1975).

    Google Scholar 

  6. Irving Fisher, The Theory of Interest (New York: Macmillan, 1930).

    Google Scholar 

  7. Joseph Conard, An Introduction to the Theory of Interest (University of California Press, 1966).

    Google Scholar 

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Author information

Authors and Affiliations

  1. University of Southampton, UK

    George W. McKenzie

Authors
  1. George W. McKenzie
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Copyright information

© 1976 George W. McKenzie

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McKenzie, G.W. (1976). A Theory of International Capital Flows. In: The Economics of the Euro-Currency System. Problems of Economic Integration. Palgrave, London. https://doi.org/10.1007/978-1-349-15649-8_3

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