Some economists believe that the balance of payments is what determines currency exchange rates. In fact, exchange rates are always about the purchasing power of some currencies relative to others.
Original Article: Does the Balance of Payments Determine Exchange Rates?
Frank Shostak is an Associated Scholar of the Mises Institute. His consulting firm, Applied Austrian School Economics, provides in-depth assessments and reports of financial markets and global economies. He received his bachelor's degree from Hebrew University, master's degree from Witwatersrand University and PhD from Rands Afrikaanse University, and has taught at the University of Pretoria and the Graduate Business School at Witwatersrand University.
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