The monetary approach views balance-of-payments problems as essentially transitory and self-correcting, provided the authorities do not sterilize the effects of the changes in reserves by means of compensating the changes in domestic credit.
However, an extensive use of exchange and capital controls exercised by a majority of the LDCs to deal with their balance-of-payments difficulties would render the assumptions underlying the market-clearing process as postulated by this theory implausible.
The Monetary Theory of Balance-of-Payments Policies.
Traditional Approaches to Balance-of-Payments Analysis.
support of more than US$17 billion by the IMF and other official creditors is expected to meet Thailand's external financing requirements through 1998 and help achieve its foreign reserve targets.
Excess Supplies of Money and the Balance-of-Payments Deficits, Kyklos, 24, 775-777.
Aspects of Balance-of-Payments and Exchange-Rate Theory in Italian Economic Thought, in Tullio, Giuseppe, The Monetary Approach to External Adjustment: A Case Study of Italy, New York: St.