MONETARY THEORY OF THE BALANCE OF PAYMENTS: AN EMPIRICAL STUDY OF THREE DEBTOR COUNTRIES, ARGENTINA, VENEZUELA AND YUGOSLAVIA.

摘要

Monetary theory of the balance of payments and its application to the three countries of my study concentrates on the general equilibrium approach, in which capital movements are not exogenously determined.;The new monetary approach to the balance of payments consists of three segments: a theory of the demand for money, a money supply process, and finally, an outcome which is the reduced-form reserve-flow equation when the money market is at equilibrium.;In Chapters IV, V and VI, I have applied my model to three different countries: Argentina, Venezuela, and Yugoslavia. The statistical results of the reduced-form reserve-flow equations in these countries are consistent with the monetary approach propositions.;To investigate the relationship between the government's debt and other economic variables in my model, I have assumed that domestic credit is determined endogenously and is under the control of the monetary authorities. I have then postulated the change in domestic credit over time as the difference between fiscal revenue and government debt from the government expenditure in each country. After substituting this relationship into the reduced-form reserve-flow equation, I have derived the government debt equation.;Under a fixed exchange rate system, the excess supply of and demand for money would result in changes in international reserves. On the other hand, under flexible exchange rate, an excess supply of money would induce an exchange depreciation rather than a loss in foreign reserves; an excess demand would result in appreciation.;The most important policy variable is the growth rate of the United States' interest rates. There is always a positive relationship between this variable and the government debt in each country. A reduction in United States' interest rates will help to reduce the government debt in Argentina, Venezuela and Yugoslavia and therefore help the international monetary system.