Chapter 19 Macroeconomic Policy and Coordination under Floating Exchange Rates 国际财务管理课件.pptVIP

Chapter 19 Macroeconomic Policy and Coordination under Floating Exchange Rates The Case for Floating Exchange Rates The Case Against Floating Exchange Rates Macroeconomic Interdependence Under a Floating Rate What Has Been Learned Since 1973? Are Fixed Exchange Rates Even an Option for Most Countries? Directions for Reform Introduction The floating exchange rate system, in place since 1973, was not well planned before its inception. By the mid-1980s, economists and policymakers had become more skeptical about the benefits of an international monetary system based on floating rates. Why has the performance of floating rates been so disappointing? What direction should reform of the current system take? This chapter compares the macroeconomic policy problems of different exchange rate regimes. 19-1 The Case for Floating Exchange Rates There are three arguments in favor of floating exchange rates: Monetary policy autonomy Symmetry Exchange rates as automatic stabilizers Monetary Policy Autonomy Floating exchange rates: Restore monetary control to central banks Allow each country to choose its own desired long-run inflation rate Symmetry Floating exchange rates remove two main asymmetries of the Bretton Woods system and allow: Central banks abroad to be able to determine their own domestic money supplies The U.S. to have the same opportunity as other countries to influence its exchange rate against foreign currencies Exchange Rates as Automatic Stabilizers Floating exchange rates quickly eliminate the “fundamental disequilibriums” that had led to parity changes and speculative attacks under fixed rates. Figure 19-1 shows that a temporary fall in a country’s export demand reduces that country’s output more under a fixed rate than a floating rate. 19-2 The Case Against Floating Exchange Rates There are five arguments against floating rates: Discipline Destabilizing speculation and money market disturbances Injury to international trade and investment Uncoordinated eco