This thesis attempts to focus on several 'unresolved' issues that exist in the field of open-economy macroeconomics. 41 Chapter 2 examines the implications of1currency substitution, (CS) for the behaviour of a small open economy, subsequent to an unanticipated contraction in the domestic money supply. Chapter 3 concentrates on the role of CS, capital mobility and price stickiness in the international transmission of disturbances. Chapter 4 explores how the degree of openness of national economies might influence the relationships among exchange rates, price levels, interest rates and international balances of payment. Chapter 5 examines the relative effectiveness of various simple policy rules for economic stabilization, under alternative assumptions about the degree of openness of individual economies. In Chapter 6 we study the behaviour of a semi-small open economy subsequent to (unanticipated) increases in foreign interest rates, using a model in which some of the key characteristics of the major debtor countries are incorporated. In Chapter 7 we analyse the effects of exogenous financial disturbances on the economy of a debtor country, under alternative assumptions about the nature of its external debt. Chapter 1 attempts to provide a "background' for the analysis in the remainder of the thesis, by discussing some of the developments in the theoretical literature and in the world economy that have motivated our study.