Publisher Summary This chapter focuses on international economics. International economics is concerned with economic relations that overlap more than one nation. It includes transactions between the private sectors of different countries, the economic actions of governments that impinge on foreigners, and the actions of private agents with a base in more than one country. International economics is divided into two main areas, between which there is rather little, probably too little, intellectual contact. The term monetary theory derives from the fact that it is impossible to conceive of macroeconomic disequilibrium without money. An interesting study dealing primarily with the microeconomics of exchange markets is R. I. McKinnon: Money in International Exchange: The Convertible Currency System.