This book collects together the basic documents of an approach to the theory and policy of the balance of payments developed in the 1970s. The approach marked a return to the historical traditions of international monetary theory after some thirty years of departure from them – a departure occasioned by the international collapse of the 1930s, the Keynesian Revolution and a long period of war and post-war reconstruction in which the international monetary system was fragmented by exchange controls, currency inconvertibility and controls over international trade and capital movements.

This publication is the Decision System for a community-type society. A decision system describes the formal structuring of decisions involving a comprehensive information system that resolves into a modification to the state-dynamic of the material environment. A decision system is a collection of information-processing components -- often involving humans and automation (e.g., computing) -- that interact toward a common set of objectives. This decision system is designed to coordinate and control the flow of resources for global accessibility to all goods and services. To navigate in common, humanity must also decide in common. Herein, individuals maintain a relationship to resources that focuses on access rather than possession, maximizing the advantages of sharing, and incentivizing cooperative, rather than competitive, interest. All requirements relevant to human fulfillment and ecological well-being are factored in to the allocation of resources, optimizing quality-of-life for all, while ensuring the persistence of the commons. The standard’s decision processes produce tasks that are acted upon by an intersystem (a.k.a., “interdisciplinary”) team involving the coordinated planning and operation of projects. Through this comprehensive and transparent decisioning process individuals know precisely what needs to be accomplished to sustain and evolve their fulfillment. Herein, through formalized decisioning and cooperation humanity may continuously restructure society toward a higher potential dynamic of life experience for all. The use of a common social approach and data set allows for the resolution of societal level decisions through common protocols and procedural algorithms, openly optimized by contributing users for aligning humanity with its stated values and requirements.

This volume brings together several of the most important research papers on the monetary approach to the balance of payments prepared by IMF staff members. The 11 papers record, the contribution made by the IMF's staff to the development of the monetary approach, which is now widely accepted by academic economists and policymakers alike.

How can relative price and income approaches be reconciled with balance of payments analysis? John F. Kyle argues that a model is required which explicity includes a production sector and a complete monetary sectory. The author demonstrates the inadequacy of the traditional method of extending macroeconomic models to deal with trade problems and proceeds to develop a properly specified open economy model adequate to the task. After extending the model to look at additional issues, he relates the principal results obtained in a macroeconomic setting to those produced using a Hahn-type monetary approach. The Hahn model is extended to incorporate an alternative financial asset and to allow for unemployment in the economy. His theory of the balance of payments takes into account both important monetary and aggregate demand features of macroeconomics and the relative prices and interdependencies of general equilibrium theory. Originally published in 1976. The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.