Abstract
Fundamental to international finance is the idea of ‘external balance’, whereby a country’s external indebtedness does not threaten its ability to meet its international obligations. The requirements of external balance have varied with the nature of the linkages among economies across historical episodes. This article both reviews the major developments in the economic analysis of external balance and traces how nations have sought to achieve it from the era of the gold standard in 19th century through the Bretton Woods system to the era of floating exchange rates that began in 1973.
This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume
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Acknowledgements
Recent general perspectives on international finance may be found in International Monetary Fund, new open economy macroeconomics and World Bank, as well as entries on various specific aspects of international economics.
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Obstfeld, M. (2008). International Finance. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_730-2
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DOI: https://doi.org/10.1057/978-1-349-95121-5_730-2
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Latest
International Finance- Published:
- 28 March 2017
DOI: https://doi.org/10.1057/978-1-349-95121-5_730-2
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International Finance- Published:
- 23 November 2016
DOI: https://doi.org/10.1057/978-1-349-95121-5_730-1