The Theory of International Trade, Vol. 2: The Theory of International Capital Movements (Economists of the Twentieth Century series)

This volume collects John S. Chipman's most influential work on the theory of international movements of capital (both physical and financial). The main emphasis is the effects of these movements on resource allocation within countries, and the consequent changes in relative prices and thus both real and nominal exchange rates, as well as the terms of trade. It is argued that chronic deficits or surpluses in countries' balances of payments on current account are in all but a few cases the consequence of capital movements resulting from demographic, governmental budgetary, and other causes, as opposed to the popular view that they result from the manipulation of exchange rates.This book will be an essential source of reference for both instructors and graduate students concerned with international trade theory.