This work investigates the theoretical framework and empirical validity of the monetary approach to balance of payments adjustments. Jacob A. Frenkel, a prominent economist, synthesizes classical and modern monetary theories to explain how changes in the money supply and demand influence a nation's international reserves and trade balance. The text argues that balance of payments disequilibria are essentially monetary phenomena rather than purely real-sector imbalances.

Economists and scholars frequently cite this text as a foundational contribution to international macroeconomics. Readers often note the high level of mathematical rigor and the dense, technical nature of the arguments presented.