Abstract
The absorption approach to the balance of payments states that a country’s balance of trade will only improve if the country’s output of goods and services increases by more than its absorption, where the term ‘absorption’ means expenditure by domestic residents on goods and services. This approach was first put forward by Alexander (1952, 1959).
This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman
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Bibliography
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Vines, D. (1987). Absorption Approach to the Balance of Payments. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_129-1
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DOI: https://doi.org/10.1057/978-1-349-95121-5_129-1
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Latest
Absorption Approach to the Balance of Payments- Published:
- 13 March 2017
DOI: https://doi.org/10.1057/978-1-349-95121-5_129-2
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Original
Absorption Approach to the Balance of Payments- Published:
- 15 November 2016
DOI: https://doi.org/10.1057/978-1-349-95121-5_129-1