A Note on the International Impact of Cyclical Movements

Abstract

The problem of the international propagation of cyclical movements can be considered from two aspects: that of the balance of payments, and that of the level of employment and economic activity. In practice these two aspects are intricately related. The repercussions of external changes on the internal employment levels of a particular country are directly associated with their repercussions on that country’s payments balance; while the need to restore equilibrium in the balance of payments of a particular country may entail further repercussions on levels of employment, both internal and external. For purposes of analysis, however, it is best to treat the two aspects separately.