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

Chapter 18 The International Monetary System, 1870-1973;The External Balance Problem of the United States Worldwide Inflation and the Transition to Floating Rates ;Introduction;18-1 Macroeconomic Policy Goals in an Open Economy;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. ;Problems with Excessive Current Account Surpluses: They imply lower investment in domestic plant and equipment. They can create potential problems for creditors to collect their money. They may be inconvenient for political reasons.;Several factors might lead policymakers to prefer that domestic saving be devoted to higher levels of domestic investment and lower levels of foreign investment: It may be easier to tax It may reduce domestic unemployment. It can have beneficial technological spillover effects ;18-2 International Macroeconomic Policy Under the Gold Standard, 1870-1914;External Balance Under the Gold Standard Central banks Their primary responsibility was to preserve the official parity between their currency and gold. They adopted policies that pushed the nonreserve component of the financial account surplus (or deficit) into line with the total current plus capital account deficit (or surplus). A country is in balance of payments equilibrium when the sum of its current, capital, and nonreserve financial accounts equals zero. Many governments took a laissez -faire attitude toward the current account.;The Price-Specie-Flow Mechanism The most important powerful automatic mechanism that contributes to the simultaneous achievement of balance of payments equilibrium by all countries The flows of gold accompanying deficits and surpluses cause price changes that redu