Chapter 18 The International Monetary System, 1870-1973
Chapter 18 ▪ The International Monetary System,1870-1973
Chapter organization Macroeconomic Policy Goals in an Open Economy International Macroeconomic Policy Under the Gold Standard. 1870-1914 The Interwar Years. 1918-1939 a 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 Copyright C 2003 Pearson Education, Inc Slide 18-2
Copyright © 2003 Pearson Education, Inc. Slide 18-2 Chapter Organization ▪ 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
Chapter organization The External balance Problem of the united states a Worldwide Inflation and the Transition to Floating Rates Summary Copyright C 2003 Pearson Education, Inc Slide 18-3
Copyright © 2003 Pearson Education, Inc. Slide 18-3 ▪ The External Balance Problem of the United States ▪ Worldwide Inflation and the Transition to Floating Rates ▪ Summary Chapter Organization
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 Copyright C 2003 Pearson Education, Inc Slide 18-4
Copyright © 2003 Pearson Education, Inc. Slide 18-4 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
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 countrys 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 Copyright C 2003 Pearson Education, Inc Slide 18-5
Copyright © 2003 Pearson Education, Inc. Slide 18-5 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