Aspects of Balance-of-Payments and Exchange-Rate Theory in Italian Economic Thought

Abstract

The objectives of this chapter are to discuss some aspects of the theory of balance-of-payments and exchange-rate changes which have dominated Italian economic thought throughout the last three and a half centuries, and to point out similarities of the Italian theory with the modern revival of the classical theory of the balance of payments and the exchange rate, commonly labelled as the ‘monetary approach’. The chapter also clarifies some basic assumptions and fundamental implications of the theory upon which the empirical tests of the following chapters are based.