文档介绍：International ary System
I. Domestic ary Policy
II. International ary Policy
A. Fixed Exchange Rates
B. Floating Exchange Rates
C. Managed Exchange Rates
Domestic Policy
z Fiscal Policy: Taxation and (Government)
Spending
z ary Policy: Money Supply and Interest
Rates
z Federal Reserve controls interest rates
through:
• Reserve Requirements (% of deposits banks cannot
lend)
• Discount Rate (interest rate Fed charges to banks)
• Open Market Operations (buy/sell government bonds)
US National Debt as a Percentage of GDP
140
120
100
80
60
40
Percentage of GDP of Percentage
20
0
5 0 5 0 5 0 5 0 5 4
4 5 8 9 9
97 97 98
19 19 1955 1960 196 1 1 1 19 19 19 2000 200
Source: Statistical Abstract of the United States, 2000
International ary Policy
z Primary deals with EXCHANGE RATES
z Exchange Rate: relative value of national
currencies on international markets (or value
of one currency in another currency)
z Three Type of Exchange Rate Systems:
• Fixed (or Pegged)
• Floating (or Flexible)
• Managed (or Coordinated)
z Goals: Stability, Flexibility, Credibility
Examples of Fixed Exchange Rate
Systems
z Gold Standard: currency pegged to a
particular value/oz. in gold (Late 1800s-1920s)
z Bretton Woods/Dollar Standard: currencies
pegged to dollar; value of dollar fixed at
$35/oz. of gold.
• Triffin Dilemma: Needed outflow of dollars to
maintain liquidity of system, but this undermined
value of dollar.
z “The Snake”/EMS/ERM: European systems of
semi-fixed exchange rates; fluctuation within
pre-set bands (., +/- %).
Changes in Exchange Rates and Trade
DAY 1: £ 1 (UK) = $1 (US)
z Bass Ale in UK costs £1 z Budweiser in US
z Budweiser in UK Costs Costs $1
£1 z Bass Ale in US costs $1
DAY 2: £ 1 (UK) = $ (US)
FALL in £; RISE in $
z Bass Ale in UK costs £1 z Budweiser in US
z Budweiser in UK Costs Costs $1
£2 z Bass Ale in US costs
50¢
Effects on Balance