THE ACCOUNTING FRAMEWORK OF CERTAIN BALANCE OF PAYMENTS THEORIES: A DIDACTIC NOTE

Abstract

Balance of payments theory is endowed with several schools of thought each approaching the problem from a slightly different angle. To most professional economist this multiplicity is a source of strength, each school highlighting certain problems and largely ignoring others, but to many students it is, in my experience, a source of confusion. This note, pedagogical in intent, seeks not to draw fresh parallels between the various schools but to place them all within a single accounting framework so that their similarities and differences are readily apparent. The model used for this purpose is perhaps overly simple but it does, I believe, capture the essential features and it is amenable to expansion and adaptation to illustrate particular points. Above all I have, for several years, found it a useful vehicle for illustrating the common ground in the various approaches to the theory of the balance of payments.

Citation

WINTERS, L.A. (1978), "THE ACCOUNTING FRAMEWORK OF CERTAIN BALANCE OF PAYMENTS THEORIES: A DIDACTIC NOTE", Journal of Economic Studies, Vol. 5 No. 1, pp. 31-36. https://doi.org/10.1108/eb008071