This paper focuses on official intervention on the forward exchange market. The purpose is to provide a straightforward account of the theory of intervention and to use it to discuss the problems raised. The forward exchange market may be conveniently treated in terms of stocks rather than of...

This chapter presents a review article on the purchasing power parity (PPP) theory of exchange rates. The PPP theory involves the ratio of two countries' price levels or price indices times a base period exchange rate as the most important variable determining the exchange rate, but it allows...

This paper provides the nexus between short-term interest rates, private monetary capital flows, and the exchange rate under managed floating. It questions the belief held by many economists that capital flows necessarily have benign effects that prevent large erratic movements in the exchange...

This paper examines the proposition that flexible exchange rates are more (less) inflationary than a system of fixed exchange rates. The paper first discusses possible effects of a change in the exchange rate regime on the price level. It examines the two arguments that flexible exchange rates...

This paper studies the role of domestic and foreign savings in financing capital formation in 19 industrial countries during the years after World War II. The authors' interpretation of the statistical evidence is that there is very little support for the view that, over the medium term, goods...

This paper examines the validity of the hypothesis that the level of the real wage rate, inclusive of employers' expenditures for social insurance and employment or payroll taxes, is a major obstacle to a return to high employment in industrial countries. The hypothesis is tested by estimating a...

This paper highlights exchange rate movements and adjustment in financial markets. This paper develops a model of portfolio behavior in which it is assumed that market participants act as if they always expected exchange rates to move in line with expected inflation differentials. In the...

This paper analyzes the efficacy of alternative financial stabilization policies in response to disturbances from various sources. A model, appropriate to the institutional structure of a developing country, is estimated. The model is subjected to shocks from the domestic real economy, domestic...

The purpose of this paper is to formulate a model for developing countries that allows output, prices, international reserves, money, and government taxing and expenditure policies to be determined simultaneously. The model developed, which stresses the key role of monetary disequilibrium, is a...

The paper discusses the application of economic analysis and statistics to several questions of tax administration and legislation bearing on it. The principle of equalizing marginal administrative costs and marginal tax revenue is suggestive, but persuasive arguments can be made for spending...