In this article we will discuss about the correction in balance of payments through variations in exchange rates. If a country suffers from payments deficits, the equilibrium adjustments can be possible through the suitable variations in exchange rates. Under the IMF Charter, a member country is permitted to make an adjustment in its exchange parity to deal with a fundamental [...]
The monetary approach to the balance of payments is associated with the names of R. Mundell and H. Johnson. The other writers who have made contribution to it include R. Dornbusch, M. Mussa, D. Kemp and J. Frankel. The basic premise of the approach is the recognition that the BOP disequilibrium is fundamentally a monetary phenomenon. It attempts to explain [...]
In this article we will discuss about the theory of protection which is a highly important issue in foreign trade. The foreign trade policy has been the subject of heated discussion since the time of Adam Smith who advocated for free trade and recommended that tariffs should be removed to avail of the advantages of free trade. Even today, economists [...]