Previous research on the intertemporal approach is based on the standard, real model of the balance of trade. This paper outlines a more general model that allows for monetary non-neutrality, and tests the general model against a restricted version that embodies neutrality. While the empirical...

Research based on the Kouri-Porter (1974) model of international capital flows suggests that the central banks of nonreserve countries enjoyed considerable monetary independence during the Bretton Woods era. This paper is a theoretical and empirical reassessment of this conclusion. Using a...