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PowerPoint Presentation by Charlie Cook Copyright © 2004 South-Western. All rights reserved.
Chapter 16International
Dimensions of Macroeconomic
Policy
Copyright © 2004 South-Western. All rights reserved. 16–2
Fundamental Issues
1. What are the pros and cons of fixed versus floating exchange rates?
2. How does greater integration of global financial markets affect macroeconomic policymaking?
3. In what ways can greater worldwide capital mobility add to or detract from international macroeconomic stability?
Copyright © 2004 South-Western. All rights reserved. 16–3
Fundamental Issues (cont’d)
4. What are the key multinational policymaking institutions, and what problems do they face in trying to deal with global instabilities caused by international financial crises?
Copyright © 2004 South-Western. All rights reserved. 16–4
Source: John Fernald and Victoria Greenfield, “The Fall and Rise of the Global Economy,” Chicago Fed Letter, Federal Reserve Bank of Chicago, No. 164, April 2001; Economic Report of the President and Economic Indicators, various issues. Figure 16–1
Trade Relative to GDP since 1900
Copyright © 2004 South-Western. All rights reserved. 16–5 Figure 16–2
Monetary and Fiscal Policies with Perfect Capital Mobility and Fixed Exchange Rates
Copyright © 2004 South-Western. All rights reserved. 16–6 Figure 16–3
Monetary and Fiscal Policies with Perfect Capital Mobility and Floating Exchange Rates
Copyright © 2004 South-Western. All rights reserved. 16–7Source: International Monetary Fund. Figure 16–4
Net Private Capital Flows to Developing Nationsin the Western Hemisphere
Copyright © 2004 South-Western. All rights reserved. 16–8Source: International Monetary Fund. Figure 16–5
Net Private Capital Flows to Developing Nations in Asia
Copyright © 2004 South-Western. All rights reserved. 16–9Source: International Monetary Fund. Figure 16–6
Growth in IMF Membership and
IMF Quota Subscriptions
Copyright © 2004 South-Western. All rights reserved. 16–10Source: International Monetary Fund. Table 16–1
Copyright © 2004 South-Western. All rights reserved. 16–11
Source: Barry Eichengreen, Toward a New International Financial Architecture (Washington, D.C.: Institute for International Economics, 1999), Appendix A. Table 16–2
A Sampling of Proposals to Restructure Multinational Policymaking Institutions
Copyright © 2004 South-Western. All rights reserved. 16–12
Source: Dale Gray and Mark Stone, “Corporate Balance Sheets and Macroeconomic Policy,” Finance and Development, World Bank, September 1999, pp. 56–59; Stijn Claessens, Simeon Djankov, and Larry Lang, “East Asian Corporates: Growth, Financing, and Risks,” World Bank, October 27, 1999; International Monetary Fund, World Economic Outlook, various issues. Figure 16–7
Falling Inflation Rates and Debt-Equity Ratios in Selected Nations
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