The Monetary and Portfolio Approaches

  • Giancarlo Gandolfo


The supporters of the monetary approach to the balance of payments (MABP) claimed their allegiance to David Hume (1752), considered the author of the first complete formulation of the classical theory of the mechanism for the adjustment of the balance of payments based on the flows of money (gold).


Central Bank Money Supply Money Demand Monetary Authority Balance Constraint 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Suggested Further Reading

  1. Branson, W.H., 1974, Stocks and Flows in International Monetary Analysis, in A. Ando, R. Herring and R. Marston (eds.), International Aspects of Stabilization Policies, Federal Reserve Bank of Boston Conference Series No. 12, 27–50.Google Scholar
  2. Branson, W.H. and D.W. Henderson, 1985, The Specification and Influence of Asset Markets, in R.W. Jones and P.B. Kenen (eds.), Handbook of International Economics, Vol. II, Amsterdam: North-Holland, Chap. 15.Google Scholar
  3. De Grauwe, P., 1983, Macroeconomic Theory for the Open Economy, Hampshire: Gower Publishing Co.Google Scholar
  4. Frenkel, J.A. and H.G. Johnson (eds.), 1976, The Monetary Approach to the Balance of Payments, London: Allen and Unwin.Google Scholar
  5. Gandolfo, G., 2002, International Finance and Open-Economy Macroeconomics, Berlin Heidelberg New York: Springer-Verlag, Chaps. 12, 13.Google Scholar
  6. Hume, D., 1752, Of the Balance of Trade, in D. Hume, Political Discourses, Edinburgh. Reprinted in D. Hume, 1955, Writings on Economics, edited by E. Rotwein, London: Nelson, 60ff, and (partially) in R.N. Cooper (ed.), 1969, International Finance: Selected Readings, Harmondsworth: Penguin, 25–37.Google Scholar
  7. McKinnon, R.I., 1969, Portfolio Balance and International Payments Adjustment, in R.A. Mundell and A.K. Swoboda (eds.), Monetary Problems of the International Economy, Chicago: Chicago University Press, 199–234.Google Scholar
  8. McKinnon, R.I. and W. Oates, 1966, The Implications of International Economic Integration for Monetary, Fiscal and Exchange Rate Policy, Princeton Studies in International Finance No. 16, International Finance Section, Princeton University.Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2004

Authors and Affiliations

  • Giancarlo Gandolfo
    • 1
  1. 1.Faculty of EconomicsUniversity of Rome La SapienzaRomaItaly

Personalised recommendations