Intertemporal Trade, Capital Mobility and Interest Rates

  • A. J. Makin

Abstract

This chapter analyses the relationship between international finance and macroeconomic activity by combining aspects of production, trade and finance theory. It adapts and extends the precepts of Irving Fisher’s (1930) intertemporal theory of interest rates by first highlighting the linkages between consumption, saving, investment, international financial flows, interest rates, national income, foreign debt and national wealth. It then shows how international trade in saving confers macroeconomic welfare gains before reconciling intertemporal analysis with a loanable funds approach that can be used as a basis for interpreting international capital mobility.

Keywords

Interest Rate International Trade Financial Economic National Income International Capital 
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Copyright information

© A.J. Makin 2003

Authors and Affiliations

  • A. J. Makin
    • 1
  1. 1.University of QueenslandBrisbaneAustralia

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