In this article we will discuss about the ways for measuring deficit or surplus in balance of payments. It is only when all items in the balance of payments are included that there is no possibility of a deficit or surplus. But if some items are excluded from a country’s balance of payments and then […]
Measuring Deficit or Surplus in Balance of Payments
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Top 7 Measures to Correct Deficit Balance of Payments
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The following points highlight the top seven measures to correct deficit balance of payments. The measures are: 1. Adjustment through Exchange Depreciation 2. Devaluation or Expenditure-Switching Policy 3. Direct Controls 4. Adjustment through Capital Movements 5. Adjustment through Income Changes 6. Stimulation of Exports and Import Substitutes 7. Expenditure-Reducing Policies. Measure # 1. Adjustment through […]
Top 3 Approaches of Balance of Payments
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The following points highlight the top three approaches of balance of payments. The approaches are: 1. The Elasticity Approach 2. The Absorption Approach 3. The Monetary Approach. 1. The Elasticity Approach: Marshall-Lerner Condition: The elasticity approach to BOP is associated with the Marshall-Lerner condition which was worked out independently by these two economists. It studies […]