The Monetary Approach to Balance of Payments: A Taxonomy with a Comprehensive Reference to the Literature (Economics ARTICLES‪)‬

ABSTRACT This paper provides a taxonomy of the monetary approach to the balance of payments with a comprehensive reference guide to the literature. The paper very briefly reviews the three major alternative theories of balance of payments adjustments. These theories are the elasticities and absorption approaches (associated with Keynesian theory), and the monetary approach. The paper focuses on the monetary approach to balance of payments and points to the long-run and short-run lines of research within the monetary approach to balance of payments. Throughout, the paper provides a comprehensive set of references corresponding to each point discussed. Together, these references exhaust the existing literature on the monetary approach to balance of payments.