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Balance Of Payments And Macroeconomic Policies: An Historical Overview And Implications For Agricultural Trade

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  • Denbaly, Mark

Abstract

Misunderstanding the predominant forces that determine the balance of payments (BOP) has resulted in the recommendation that restrictive trade policies be used to solve the current U.S. BOP "problems." This paper reviews the BOP relationships, accounting concept, theory, and history (1975-86). It shows how various account balances respond simultaneously to international macroeconomic developments and that movements in agricultural trade have mirrored the movements in nonagricultural trade. Imbalances are caused by the same forces and should not be viewed as problems in and of themselves. Therefore, macroeconomic, not commodity-specific, policies are more likely to alleviate imbalances.

Suggested Citation

  • Denbaly, Mark, 1988. "Balance Of Payments And Macroeconomic Policies: An Historical Overview And Implications For Agricultural Trade," Staff Reports 278121, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:278121
    DOI: 10.22004/ag.econ.278121
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    File URL: https://ageconsearch.umn.edu/record/278121/files/ers-report-370.pdf
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    References listed on IDEAS

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    6. International Monetary Fund, 1981. "World Economic Outlook," IMF Occasional Papers 1981/003, International Monetary Fund.
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