This entry briefly covers the analysis of the balance of payments and exchange rates from mercantilism to the 1980s’ monetary approach to the balance of payments.

The first section is devoted to the emergence in the eighteenth century of the concept of balance of trade equilibrium. The second section presents the distinction and connection between the balance of trade and the balance of payments developed and discussed in the first half of the nineteenth century. The third section studies the 1870-1930 period and the gold standard failure. The last section describes the open macroeconomic approach after the great depression.