The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Jul, 1954, Volume 22, Issue 3
https://doi.org/0012-9682(195407)22:3<360:SOTERM>2.0.CO;2-8
p. 360-389
J. J. Polak, Ta-Chung Liu
The conditions under which a devaluation will improve a country's balance of payments--stability conditions of exchange rate adjustments--have been extensively dealt with in literature for a two-country system under static conditions. This paper represents an attempt to analyze the complications arising from the introduction of more countries into the system under dynamic conditions. The dynamic stability conditions for an n-counutry model have been derived in mathematical terms through a system of difference equations under quite general conditions in the Appendix. Special pain has been taken in the text to interpret these mathematical conditions in economic terms for a more restricted three-country model. Three cases of exchange rate adjustments have been analyzed. It has been found that, provided that each country taken by itself is stable (i.e., that a depreciation of its currency will improve its balance of payments, all other countries' par values remaining unchanged), a sufficient condition for the stability of a three-country system is that, for any pair of countries, the absolute value of the product of the effects on each others' balances, each acting alone, is smaller than the product of the effects on their own balances.
March 5, 2024
The terms of the Editors of the Econometric Society's three journals end June 30, 2025. We are pleased to announce the incoming Editors and to thank the outgoing Editors for their excellent and continuing service.
Econometrica: Since 2019, Guido Imbens has served as the 14th Editor of Econometrica. On July 1, 2025, Marina Halac will become the Editor.
Quantitative Economics: Stéphane Bonhomme has been the Editor of Quantitative Economics since 2021. His successor will be Bernard Salanié.
Theoretical Economics: The Editor of Theoretical Economics since 2021 has been Simon Board. Taking over for him in July 2025 will be Federico Echenique.
Guido, Stéphane, and Simon have been outstanding Editors. We are grateful to them for the work they have done and will continue to do, and we look forward to further congratulating them next year. We believe Marina, Bernard, and Federico will be outstanding successors and we thank them in advance for their service.
Finally, we are grateful to Larry Samuelson for chairing all three search committees, and we thank the search committee members for their hard and fruitful work:
Econometrica: Christian Dustmann, Lars Hansen, Alessandro Lizzeri, George Mailath, Ariel Pakes, Helene Rey, and Elie Tamer.
QE: Kate Ho, Michael Keane, Felix Kubler, Whitney Newey, and Frank Schorfheide.
TE: Jeff Ely, Johannes Horner, Gilat Levy, Meg Meyer, and Ran Spiegler.
