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The Exchange Rate and the Balance of Payments

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  • Currie, David
  • Hall, Stephen

Abstract

In designing an expansionary fiscal package, a key consideration is the exchange rate. This is because undue and possibly destabilising movements in the exchange rate in response to domestic expansion could trigger expectations that the policy will be reversed, and such expectations might indeed be fulfilled. An understanding of the consequences of domestic expansion for the exchange rate is therefore crucial.

Suggested Citation

  • Currie, David & Hall, Stephen, 1986. "The Exchange Rate and the Balance of Payments," National Institute Economic Review, National Institute of Economic and Social Research, vol. 115, pages 74-82, February.
    • Handle: RePEc:cup:nierev:v:115:y:1986:i::p:74-82_8
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