《國際經濟關系》Chapter2

Chapter2

GoverningtheInternationalMonetarySystemTheinternationalmonetarysystemisatthecenteroftheinternationaleconomy.thesystemprovidestheframeworkfortrade,investment,andothereconomictransactionsandpaymentsacrossinternationalboundaries.Moneyisalsocentraltonationalsovereignty.Theabilitytoissuecurrencyandtoinfluenceitsvalueareimportantprerogativesofnationalgovernmentsandtoolsofdomesticeconomicpolicies.

TheBRETTONWOODSSYSTEMFROMBRETTONWOODSTOINTERDEPENDENCEINTERDEPENDENCEGLOBALIZATIONCRISISMANAGEMENTINTHE1990SGLOBALMONETARYGOVERNANCEINTHETWENCY-FIRSTCENTURYTHEBRETTONWOODSSYSTEMTheoriginalBrettonWoodsSystemUnitedStatesLeadershipMultilateralManagementUnderU.SLeadershipTheoriginalBrettonWoodsSystemInJuly1944,representativesofforty-fournationsmetonanestateinBrettonWoods,NewHampshire,tocreateanewinternationalmonetaryorder.Theirgoalwastoestablishaninternationaleconomicsystemthatwouldpreventanothereconomicandpoliticalcollapseandanothermilitaryconflict.Theirbeliefswerethatpreviousmonetarysystemsthatreliedprimarilyonmarkedforceshadprovedinadequateandthattheworldneededapubliclymanagedinternationalmonetaryorder.UnitedStatesLeadershipThestrengthoftheU.Seconomy,thelessonsoftheinterwarperiod,andsecurityincentivesmadeU.Sleadershipacceptableathomebotheconomicallyandpolitically.TheEuropeansandJapanesealsoacceptedU.Smanagement.Economicallyexhaustedbythewar,theyneedsU.Sassistancetorebuildtheirdomesticproduction,financetheirinternationaltrade,andprovideasettingforpoliticalstability.Theonlycurrencystrongenoughtobeusedtomeettherisingdemandsforinternationalliquiditywasthedollar.Itfacilitatedshot-termadjustmentthroughforeignaidandmilitaryexpenditures.MultilateralManagementunderU.SLeadershipTheGroupofTenwasformedinDecember1961whenrepresentativesoftenindustrialcountries-Belgium,Canada,France,Germany,Italy,Japan,theNetherlands,Sweden,theUnitedKingdom,andtheUnitedStates-mettocreatetheGeneralArrangementstoBorrow,a$6billionfundsforexchangeratemanagementthatwasunderthecontrolofthetenmember.FROMBRETTONWOODSTOINTERDEPENDENCEFinancialInterdependenceandPluralismTheNixonShockandtheEmergenceofFloatingExchangeRatesPetrodollarRecycling

FinancialInterdependenceandPluralismAfinalsourceoffinancialinterdependenceinthisperiodwastheEurocurrencymarket.Thesenewformsoffinancialinterdependenc-emadepossiblehugeinternationalcapitalfl-owsthatputgreatstrainontheinternationalmonetarysystem.TheNixonShockandtheEmergenceofFloatingExchangeRatesNewproblemscreatedbyinterdependence,includinghugeinternationalcapitalflows,sta-inedthefixedexchangeratesystemandinte-rferedwithnationaleconomicmanagement.TheUnitedStatedabdicatedmonetaryleadershipandpursuedapolicyof“benignn-eglect”.TheSmithsonianagreementprovidedlittlem-orethantemporarycrisiscontrolanddidnotsolvethefundamentalproblemsofmanagingfinancialinterdependence.Theeffortofthecommitteeoftwentytoachi-evereformalsowasunsuccessful.PetrodollarRecyclingManyoftheoil-consumingcountriescouldn-otreducetheiroilconsumptionsufficientlytoeliminatethedeficitsorincreaseexportssuff-icientlytocoverthegap.Thustheyhadtobo-rrowingtopayfortheirdeficits,andtheonlysourcesforsuchborrowingwerethecountri-eswithsurplusesfromoilearnings.Forayearandahalf,theworldfocusedontheoverwhelmingproblemofcopingwiththeimmediateconsequencesoftheoilshock:inflation,recession,andrecycling.INTERDEPENDENCEGrowingFinancialInterdependenceLiquidity:TheProblemoftheDollaradjustmentUnderFloatingExchangeRatesStabilityandCrisisManagementEurope’sEffortstoBuildaRegionalMonetarySystemGrowingFinancialInterdependenceMostdevelopedcountries-theUnitedKingdo-m,France,Germany,Canada,Australia,and,toalesserdegree,Japan-relaxedexchangecontrols,openeddomesticmarketstoforeignfinancialinstitutions,andremovedsomedo-mesticregulatorybarriers.Revolutionsintelecommunications,informati-onprocessing,andcomputertechnologiesmadepossibleavastlyincreasedvolume,sp-eed,andglobalreachoffinancialtransaction-s.Liquidity-TheProblemoftheDollarDespitecontinuingchallengestothedollar’scredibilityandpersistentdissatisfactionabro-adwithU.Sdollarsurvivedastheworld’sma-jorcurrency.Holdingandusingcurrenciesotherthanthedollarbecamemoreattractiveinthe1980sastheU.Sbalanceofpaymentsweakeneddra-matically,whileothercountries,particularlyJapanandGermany,accumulatedpaymentssurpluses.AdjustmentUnderFloatingExchangeRatesFloatingexchangerates(asopposedtothefixedratesofBrettonWoods)wereacentralcharacteristicofthenewinternationalmonetarysystem.Proponentshadarguedthatafloatwouldprovideforrelativestabilityandrationalityinchangeratesthroughthestabilizingeffectofspeculation.CollectivemanagementseemedtoachievesomesuccesswhenGermany,France,andJapanagreedattheEconomicSummitinBonnin1978topursuemoreexpansionarypolicies,andtheUnitedStatesagreed,asatrade-off,onaprogramtocurbinflationandenergyconsumption.StabilityandCrisisManagementCrisesduringtheperiodofinterdependenceoriginatedprimarilyintwomassivefinancialimbalancesthatwerenotadjustedthroughmarketmechanismsandpolicycoordination:theimbalancebetweenoil-exportingcountriesandthetwindeficitsoftheUnitedStates.Alargebudgetdeficitwastheresultofloweringtaxeswithoutreducinggovernmentspending.Thebudgetdeficitcontributedtothetradeandbalance-of-paymentsdeficitsbyincreasingdemandforimportsandcreatingfavorableconditionsforcapitalinflows.Europe’sEffortstoBuildaRegionalMonetarySystemMembersoftheEuropeanUnion,withtheirhighlevelofintra-EUtradeandcross-borderinvestmentaswellastheirCommonAgriculturalPolicy,haveanespeciallystronginterestinstabilizingexchangeratesamongthemselves.Thissystemcalledforfixed,butadjustable,exchangeratesamongthemembersandafloatingratewiththeoutsideworld.GlobalizationGlobalizationofFinancialMarketEconomicandMonetaryUnionAdjustment

GlobalizationofFinancialMarketsJapan,whichhadretainedtightdomesticregulatorycontrolandhadkeptitsmarketsmoreclosedthananyotherdevelopedcountry,graduallyopeneditsmarkets.TheEuropeanUniontookimportantstepstowardsfinancialliberalization.Manydevelopingcountrieslaunchedliberalizationeffortsbyreducingexchangeratecontrolsandotherbarrierstointernationalcapitalmovementsandbyopeningtheirdomesticfinancialmarketstoforeigninvestors.EconomicandMonetaryUnionTheSEAmandatedremovalofallobstaclestocompletingtheinternalmarket,includingcapitalcontrols.InJanuary1994,theEuropeanMonetaryInstitutewascreatedasaprecursortotheformationoftheEuropeanCentralBank.AdjustmentInterventionwaslimitedeffectivenessandshouldbeusedinfrequentlyandonlyundercertainconditions,thatis,whenaseriousmisalignmentcouldbealteredbyjointaction.Themajorcountriesmovedtoimprovethefundamentalsoftheireconomiesbyreducingbudgetdeficitsandinflationandbyimplementingmarketreforms.Thedollarcontinuedtobethecurrencyofchoiceforofficialreserves.Thenumbertwoandthreecurrencieswerethedeutschemarkandtheyen.CRISISMANAGEMENTINTHE1990STheEuropeanCurrencyCrisisof1992-1993TheMexicanPesoCrisisof1994-1995TheAsianFinancialCrisisof1997-1998TheRussianFinancialCrisisof1998TheLong-TermCapitalManagementCollapsePreventingFutureCrisesTheEuropeanCurrencyCrisisof1992-1993DenmarkheldareferendumontheMaastrichtTreatytodeterminewhetherthatcountrywouldjointheEMU.EconomicdecisionsmadeatthetimeofunificationgeneratedinflationarypressuresthatcausedtheGermancentralbanktoraiseinterestrates.TheMexicanPesoCrisisof1994-1995Supportedbythisinternationalsafetynet,theMexicangovernmentimplementedstringentfiscalandmonetarypoliciesthatstabilizedtheexchangeratebutcausedaseriousrecessionandweakenedthedomesticfinancialsystem.TheAsianFinancialCrisisof1997-1998TherootsoftheAsianfinancialcrisislayin