• Table of Contents
    • Abstract
    • Keywords
    • Article
      • The classical paradigm
      • The interwar period
      • The Bretton Woods period
      • Floating exchange rates
      • The intertemporal analysis of external balance
      • Sovereign borrowing and credit constraints
    • See Also
    • Bibliography
    • How to cite this article

international finance

Maurice Obstfeld
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
Alternate versions available: 1987 Edition
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Fundamental to international finance is the idea of ‘external balance’, whereby a country's external indebtedness does not threaten its ability to meet its international obligations. The requirements of external balance have varied with the nature of the linkages among economies across historical episodes. This article both reviews the major developments in the economic analysis of external balance and traces how nations have sought to achieve it from the era of the gold standard in 19th century through the Bretton Woods system to the era of floating exchange rates that began in 1973.
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See Also

Recent general perspectives on international finance may be found in International Monetary Fund, new open economy macroeconomics and World Bank, as well as entries on various specific aspects of international economics.
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How to cite this article

Obstfeld, Maurice. "international finance." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 17 January 2018 <http://www.dictionaryofeconomics.com/article?id=pde2008_I000169> doi:10.1057/9780230226203.0828

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