文明小报Chapter 18
The International Monetary System, 1870–1973
1? Chapter Organization
欣然Macroeconomic Policy Goals in an Open Economy
Internal Balance: Full Employment and Price-Level Stability
巴黎公社 External Balance: The Optimal Level of the Current Account
International Macroeconomic Policy under the Gold Standard, 1870–1914
Origins of the Gold Standard
External Balance under the Gold Standard十进制计数法
The Price-Specie-Flow Mechanism
The Gold Standard “Rules of the Game”: Myth and Reality
Box: Hume v. the Mercantilists
Internal Balance under the Gold Standard
Ca Study: The Political Economy of Exchange Rate Regimes:
Conflict over America’s Monetary Standard During the 1890s
The Interwar Years, 1918–1939
The Fleeting Return to Gold
International Economic Disintegration
职业生涯规划前言 Ca Study: The International Gold Standard and the Great Depression太空有多少个星球
The Bretton Woods System and the International Monetary Fund
Goals and Structure of the IMF
Convertibility and the Expansion of Private Capital Flows
Speculative Capital Flows and Cris
Analyzing Policy Options under the Bretton Woods System
Maintaining Internal Balance
Maintaining External Balance
不啻是什么意思Expenditure-Changing and Expenditure-Switching Policies
The External-Balance Problem of the United States
Ca Study: The Decline and Fall of the Bretton Woods System
Worldwide Inflation and the Transition to Floating Rates
Summary
2
? Chapter Overview
This is the first of five international monetary policy chapters. The chapters complement the preceding theory chapters in veral ways. They provide the historical and institutional background students require to place their theoretical knowledge in a uful context. The chapters also allow students, through study of historical and current events, to sharpen their grasp of the theoretical models and to develop the intuition tho models can provide. (Application of the theory to events of current interest will hopefully motivate students to return to earlier chapters and master points that may have been misd on the first pass.)
Chapter 18 chronicles the evolution of the international monetary system from the gold standard of
1870–1914, through the interwar years, and up to and including the post-World War II Bretton Woods regime that ended in March 1973. The central focus of the chapter is the manner in which each system addresd, or failed to address, the requirements of internal and external balance for its participants.
A country is in internal balance when its resources are fully employed and there is price le
vel stability. External balance implies an optimal time path of the current account subject to its being balanced over the long run. Other factors have been important in the definition of external balance at various times, and the are discusd in the text. The basic definition of external balance as an appropriate current-account level, however, ems to capture a goal that most policy-makers share regardless of the particular circumstances.
The price-specie-flow mechanism described by David Hume shows how the gold standard could ensure convergence to external balance. You may want to prent the following model of the price-specie-flow mechanism. This model is bad upon three equations:
1. The balance sheet of the central bank. At the most simple level, this is just gold holdings equals the money supply: G ? M.
2. The quantity theory. With velocity and output assumed constant and both normalized to 1, this yields the simple equation M ? P.
3. A balance of payments equation where the current account is a function of the real exchange rate and there are no private capital flows: CA ? f(受凉发烧E ? P*/P)
The equations can be combined in a figure like the one below. The 45? line reprents the quantity theory, and the vertical line is the price level where the real exchange rate results in a balanced current account. The economy moves along the 45? line back towards the equilibrium Point 0 whenever it is out of equilibrium. For example, the loss of four-fifths of a country’s gold would put that country at Point a with lower prices and a lower money supply. The resulting real exchange rate depreciation caus a current account surplus which restores money balances as the country proceeds up the 45? line from
a to 0.
Figure
The automatic adjustment process described by the price-specie-flow mechanism is expedited by following “rules of the game” under which governments contract the domestic source components of
their monetary bas when gold rerves are falling (corresponding to a current-account deficit) and expand when gold rerves are rising (the surplus ca).
In practice, there was little incentive for countries with expanding gold rerves to follow the “rules of the game.” This incread the contractionary burden shouldered by countries with persistent current account deficits. The gold standard also subjugated internal balance to the demands of external balance. Rearch suggests price-level stability and high employment were attained less consistently under the gold standard than in the post-1945 period.
