chapter15 International Economic Policy(宏观经济学加州大学詹姆斯·布拉德福特·德隆)概要1.ppt

CHAPTER 15 International Economic Policy Questions How has the world organized its international monetary system? What is a fixed exchange rate system? What is a floating exchange rate system? What are the costs and benefits of fixed exchange rates vis-à-vis floating exchange rates? Questions Why do most countries today have floating exchange rates? Why has western Europe recently created a “monetary union”--an irrevocable commitment to fixed exchange rates within western Europe? What were the causes of the three major currency crises of the 1990s? The Gold Standard Before World War I, nearly all of the world economy was on the gold standard a government would define a unit of its currency as worth a particular amount of gold the currency was convertible could be converted into gold freely the currency’s price in terms of gold was its parity Figure 15.2 - Growth of the Gold Standard The Gold Standard When two countries were on the gold standard, their nominal exchange rate was fixed at the ratio of their gold parities at World War II parities the U.S. dollar was equal to 1/35 of an ounce of gold the British pound sterling was set to equal 1/15.58333 ounces of gold the exchange rate of the dollar for the pound was ￡1.00=$2.40 The Gold Standard Example of currency arbitrage the U.S. government is willing to buy gold at $35 per ounce the British government is willing to buy gold at ￡15.58333 per ounce the pound trades for $2.64 (10% higher than the ratio of the gold parities - $2.40) The Gold Standard Someone with an ounce of gold could trade it to the British Treasury for ￡15.58333 trade those pounds for dollars in the foreign exchange market and get $38.50 trade the $38.50 to the U.S. Treasury for 1.1 ounces of gold repeat the process as quickly as possible, making a 10% profit each time the circle is completed Figure 15.1 - How to Profit in the Foreign-Exchange Market Weaknesses of theGold Standard The gold standard tended to be deflationary under some circums