EconomicPolicy(宏观经济学-加州大学-詹姆斯·布拉.ppt

CHAPTER 15
International Economic Policy
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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?
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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?
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Figure - Growth of the Gold Standard
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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 . dollar was equal to 1/35 of an ounce of gold
the British pound sterling was set to equal 1/ ounces of gold
the exchange rate of the dollar for the pound was £=$
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
The Gold Standard
Example of currency arbitrage
the . government is willing to buy gold at $35 per ounce
the British government is willing to buy gold at £ per ounce
the pound trades for $ (10% higher than the ratio of the gold parities - $)
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