Traditional Approaches to the External Accounts
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This chapter presents traditional approaches to external account determination by expositing and critically evaluating the main models which have surfaced over the years. The different approaches are presented largely in order of their chronological appearance. What becomes apparent is that economists’ perceptions of the theoretical and policy significance of the external accounts evolved in line with changes in the international ‘rules of the game’ which characterised the international monetary system.
KeywordsExchange Rate Real Exchange Rate Capital Mobility Capital Inflow Nominal Exchange Rate
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