Chapter 18 The International Monetary System, 1870-1973 国际财务管理课件.pptVIP

Chapter 18 The International Monetary System, 1870-1973 Macroeconomic Policy Goals in an Open Economy International Macroeconomic Policy Under the Gold Standard, 1870-1914 The Interwar Years, 1918-1939 The Bretton Woods System and the International Monetary Fund Internal and External Balance Under the Bretton Woods System Analyzing Policy Options Under the Bretton Woods System The External Balance Problem of the United States Worldwide Inflation and the Transition to Floating Rates Introduction The interdependence of open national economies has made it more difficult for governments to achieve full employment and price stability. The channels of interdependence depend on the monetary and exchange rate arrangements. This chapter examines the evolution of the international monetary system and how it influenced macroeconomic policy. 18-1 Macroeconomic Policy Goals in an Open Economy In open economies, policymakers are motivated by two goals: Internal balance It requires the full employment of a country’s resources and domestic price level stability. External balance It is attained when a country’s current account is neither so deeply in deficit nor so strongly in surplus. Internal Balance: Full Employment and Price-Level Stability Under-and overemployment lead to price level movements that reduce the economy’s efficiency. To avoid price-level instability, the government must: Prevent substantial movements in aggregate demand relative to its full-employment level. Ensure that the domestic money supply does not grow too quickly or too slowly. External Balance: The Optimal Level of the Current Account External balance has no full employment or stable prices to apply to an economy’s external transactions. An economy’s trade can cause macroeconomic problems depending on several factors: The economy’s particular circumstances Conditions in the outside world The institutional arrangements governing its economic relations with foreign countries Problems with Excessive