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With regard to the effect of growth on the balance of payments of a country, the conclusion of the Keynesian theory of income determination sharply differs from that of the monetary theory. This article suggests an integrated approach towards the derivation of the import function and the balance of payments equation for a money‐using economy from the utility‐maximising behaviour of individuals. Thereby, it shows that the difference between the conclusions of the two theories results from an incorrect specification of the balance of payments equation in the Keynesian theory.

The equation of unified knowledge says that S = f (A,P) which means that the practical solution to a given problem is a function of the existing, empirical, actual realities and the future, potential, best possible conditions of general stable equilibrium which both pure and practical reason, exhaustive in the Kantian sense, show as being within the realm of potential realities beyond any doubt. The first classical revolution in economic thinking, included in factor “P” of the equation, conceived the economic and financial problems in terms of a model of ideal conditions of stable equilibrium but neglected the full consideration of the existing, actual conditions. That is the main reason why, in the end, it failed. The second modern revolution, included in factor “A” of the equation, conceived the economic and financial problems in terms of the existing, actual conditions, usually in disequilibrium or unstable equilibrium (in case of stagnation) and neglected the sense of right direction expressed in factor “P” or the realization of general, stable equilibrium. That is the main reason why the modern revolution failed in the past and is failing in front of our eyes in the present. The equation of unified knowledge, perceived as a sui generis synthesis between classical and modern thinking has been applied rigorously and systematically in writing the enclosed American‐British economic, monetary, financial and social stabilization plans. In the final analysis, a new economic philosophy, based on a synthesis between classical and modern thinking, called here the new economics of unified knowledge, is applied to solve the malaise of the twentieth century which resulted from a confusion between thinking in terms of stable equilibrium on the one hand and disequilibrium or unstable equilibrium on the other.

The main aims of this paper include a revision of the essentials of the monetary approach to the balance of payments by constructing a monetary model, an extension of the model to explain the importation of inflation in an open economy and an application of the formulated model to the two small open economies, the Netherlands and Singapore. The most important contribution of the monetary approach to the balance of payments is its focus on the role of money as opposed to the focus of traditional approaches on the real variables and on the current account of the balance of payments. Influenced originally by Johnson (1972), there have been several theoretical as well as empirical analyses supporting the major contentions of the monetary approach to the balance of payments. Notable among these are Mussa, Frenkel and Johnson (1975), Kemp (1975), Whitman (1975), and Kreinin and Officer (1978). On the basis of common elements enclosed in the writings of these authors, it is possible to construct such a model and then solve it, first, for foreign reserves inflow, and second, for the domestic inflation rate as a dependent variable. This formulation is similar to the ones found in Bhatia (1982) and Salvatore (1983), but is broader in its implications. A check of the validity of the relationships of the monetary model is also attempted by using the annual data of the Netherlands and Singapore.

The Equal Pay Act 1970 (which came into operation on 29 December 1975) provides for an “equality clause” to be written into all contracts of employment. S.1(2) (a) of the 1970 Act (which has been amended by the Sex Discrimination Act 1975) provides:

Analyses how the status of balance of payments follows se\ill\ fulfilling expectations of currency devaluation. It is found that before a currency devaluation, whether the economy w\ill\ experience a balance‐of‐payments surplus or deficit crucial depends on the degree of capital mobility.

The purpose of this paper is to contribute to the literature on demand-driven Keynesian growth in open economies by developing a formal model that combines Dixon and Thirlwall’s (1975) export-led growth model and Thirlwall’s (1979) balance-of-payments constrained growth model into a more general specification. Then, based on the model developed in this paper, the authors analyse more broadly some important issues concerning the net impact of currency depreciation on the short-run growth.

The authors build upon Dixon and Thirlwall’s (1975) export-led growth model and Thirlwall’s (1979) balance-of-payments constrained growth model in order to develop the theoretical framework. The authors also run numerical simulations to illustrate the net impact of devaluation on the short-run growth rate in different scenarios.

The authors demonstrate that the net impact of currency devaluation on growth can go either way, depending on some structural conditions such as the average share of imported intermediate inputs in prime costs of domestic firms and the institutional capacity of trade unions to set nominal wages through the bargaining process. The model also shows that the effectiveness of a competitive real exchange rate to promote growth is higher in countries where the share of labour in domestic income is also higher.

This paper provides a coherent formal starting-point for further theoretical developments on the interrelatedness between currency devaluation, income distribution and growth. These findings provide empirically testable hypothesis for future research.

The present study proposes an alternative formal solution for the theoretical problem of imposing a balance-of-payments constraint on the process of cumulative causation often incorporated in Kaldorian growth models. In terms of policy, the framework sheds further light on the relevance of income distribution and the labour market institutional framework for the dynamics of the exchange rate pass-through mechanism and allows us to map out related conditions under which currency devaluation can promote growth.

This paper seeks to draw together the various essential elements of the conflict inflation approach within the context of an open economy and to highlight the importance of global external factors in explaining inflation.

A theoretical framework is proposed based on a model with a few simple building‐blocks. A supply side relationship that determines the trade‐off between a stable distribution of income and the external balance is first derived. As a second step the model combines the supply side relationship with James Meade's analysis of the relation between internal and external balance.

The study first shows, in the context of an small open economy, relevant trade‐offs among three crucial macroeconomics targets – external balance, internal balance, and workers/firms' aspiration balance. It then disentangles the adjustment mechanism that explains how an adverse balance of payments shocks may lead eventually to the breakdown of the conflicting claims equilibrium and inflation. Finally, it provides analytical reasons for believing that the focus of globalization (sustained and higher world demand and strong global competitiveness) is the main cause of global disinflation.

The present study provides a starting‐point for further theoretical developments within the conflict inflation approach and requires empirical testing.

The open economy conflict inflation framework could prove to be useful in improving the understanding of the relationship between global external forces and domestic inflation.

This study aims to discuss the consequences of trade-based money laundering (TBML) and informal remittance services on the sustainability of the position of balance of payments and net foreign assets of a small open economy.

This paper uses a case study design using facts related to TBML and informal remittance services on the balance of payment and net foreign assets of Sri Lanka.

The contextual analysis reveals that the growth of the informal economy promotes informal remittance services in Sri Lanka. The policy decision to peg local currency to US dollars as a result of a shortage of foreign exchange had forced people to use informal channels for different purposes. The unclear and vague customer due diligence process of the anti-money laundering and countering the financing of terrorism (AML/CFT) regime also has forced people to use informal remittance services. Criminals especially drug traffickers have grabbed the promoted informal remittance services to transfer proceeds from Sri Lanka to overseas drug suppliers. On the other hand, systematic deficiencies in monitoring and regulation of movement of fund transfers and merchandise across borders provide opportunities for criminals to use different TBML techniques to transfer funds. These limitations force policymakers and regulators to think of developing a comprehensive payment ecosystem to prevent money laundering and terrorist financing. Therefore, the global initiative is required to move towards a payment ecosystem from a recommendation-based AML/CFT regime to reduce global crimes.

This study was designed to discuss the implications of TBML and informal remittance services on the balance of payments and net foreign assets in a small open economy. The structure and size of the economy, the strength of the overall economy and the AML/CFT regime will play an important role in controlling criminal activities and combating money laundering of an economy; hence, the impact of TBML and informal remittance services will vary accordingly across the countries

This paper is an original work done by the authors, which discusses the implications of TBML and informal remittance services on the balance of payments and net foreign assets of an emerging market context.

The latest volume (10) of the Balance of Payments Yearbook of the International Monetary Fund (IMF) contains balances of payments (BP) of 74 countries for the years 1956, 1957, and partly 1958. For a number of countries comparative figures are given as far back as 1951.

Balance of payments theory is endowed with several schools of thought each approaching the problem from a slightly different angle. To most professional economist this multiplicity is a source of strength, each school highlighting certain problems and largely ignoring others, but to many students it is, in my experience, a source of confusion. This note, pedagogical in intent, seeks not to draw fresh parallels between the various schools but to place them all within a single accounting framework so that their similarities and differences are readily apparent. The model used for this purpose is perhaps overly simple but it does, I believe, capture the essential features and it is amenable to expansion and adaptation to illustrate particular points. Above all I have, for several years, found it a useful vehicle for illustrating the common ground in the various approaches to the theory of the balance of payments.