International Equilibrium: the Stories We Tell

Václav Rybáček, Dan Šťastný
Statistika, 106(2): 241–251
https://doi.org/10.54694/stat.2025.35

Abstract
Macroeconomic theory and macroeconomic aggregates are a sine qua non for the economic policy decisionmaking. It is of vital importance not only that macroeconomics aggregates are measured as correctly as possible but also that their content constitutes an appropriate input into the macroeconomic models, in line with the expectations and intentions of modellers. In this paper, we focus on the current methodological treatment of respective statistical indicators serving as an illustration of conditions under which external balance in the IS-LM-BP model is achieved and where pressures on foreign exchange rate ensue. We will investigate the consequences of the current content of external statistics indicators for their interpretation in the stories economists tell about the international equilibrium and its adjustments, whether in class or in policy-making.

Keywords
International equilibrium, BP curve, exchange rate