Do Exchange Rates Work? Another View

Author/Editor:

Robert A. Mundell

Publication Date:

April 1, 1991

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper investigates the role of exchange rates in balance of payments theories. It explores the sixteen approaches to the balance of payments, the concept of an “equilibrium” trade balance and sequential “stages” of the current account. It examines fiscal and demographic influences on the U.S. deficit. The final section considers the breakdown of the international monetary system after World Wars I and II; an evaluation of alternative proposals to correct the defects of the system; and an examination of the extent to which deficits of reserve countries have their origins in systemic problems.

Series:

Working Paper No. 91/37

Subject:

English

Publication Date:

April 1, 1991

ISBN/ISSN:

9781451977769/1018-5941

Stock No:

WPIEA0371991

Format:

Paper

Pages:

58

Please address any questions about this title to publications@imf.org