國際金融學課件：Lecture 2 The International Monetary

INTERNATIONALFINANCIALMANAGEMENTEUN/RESNICKSecondEdition2EssentialReadings

P29-49P53-571InternationalMonetarySystemInternationalmonetarysystemcanbedefinedastheinstitutionalframeworkinwhichinternationalpaymentsaremade,movementsofcapitalareaccommodated,andexchangeratesamongcurrenciesaredetermined.Itisacomplexwholeofarrangements,rules,institutions,mechanisms,andpoliciesregardingexchangerates,internationalpayments,andtheflowofcapital.2MainContentsEvolutionoftheInternationalMonetarySystemRelatedTheories:TrilemmaandOptimumCurrencyAreas.TheAsianCurrencyCrisis3Evolutionofthe

InternationalMonetarySystemBimetallism:Before1875ClassicalGoldStandard:1875-1914InterwarPeriod:1915-1944BretonWoodsSystem:1945-1972TheFlexibleExchangeRateRegime:1973-Present4Bimetallism:Before1875A“doublestandard”inthesensethatbothgoldandsilverwereusedasmoney.Bothgoldandsilverwereusedasinternationalmeansofpaymentandtheexchangeratesamongcurrenciesweredeterminedbyeithertheirgoldorsilvercontents.Grasham’lawphenomenonhasonlymadethelessvaluablemetaltocirculate.5ClassicalGoldStandard:

1875-1914Duringthisperiodinmostmajorcountries:GoldalonewasassuredofunrestrictedcoinageTherewastwo-wayconvertibilitybetweengoldandnationalcurrenciesatastableratio.Goldcouldbefreelyexportedorimported.Theexchangeratebetweentwocountry’scurrencieswouldbedeterminedbytheirrelativegoldcontents.6ClassicGoldStandardForExample:If

1ouncegold=12Francs1ouncegold=6poundsThen1pound=2Francs7ClassicalGoldStandard:

1875-1914AdvantagesoftheGoldStandard:Highlystableexchangeratesundertheclassicalgoldstandardprovidedanenvironmentthatwasconducivetointernationaltradeandinvestment.Misalignmentofexchangeratesandinternationalimbalancesofpaymentwereautomaticallycorrectedbytheprice-specie-flowmechanism.8ClassicalGoldStandard:

1875-1914Thereareshortcomings:Thesupplyofnewlymintedgoldissorestrictedthatthegrowthofworldtradeandinvestmentcanbehamperedforthelackofsufficientmonetaryreserves.9InterwarPeriod:1915-1944Exchangeratesfluctuatedascountrieswidelyused“predatory”depreciationsoftheircurrenciesasameansofgainingadvantageintheworldexportmarket.Attemptsweremadetorestorethegoldstandard,butparticipantslackedthepoliticalwillto“followtherulesofthegame”.Theresultforinternationaltradeandinvestmentwasprofoundlydetrimental.10BrettonWoodsSystem:

1945-1972Namedfora1944meetingof44nationsatBrettonWoods,NewHampshire.Thepurposewastodesignapostwarinternationalmonetarysystem.Thegoalwasexchangeratestabilitywithoutthegoldstandard.TheresultwasthecreationoftheIMFandtheWorldBank.11BrettonWoodsSystem:

1945-1972BritishPoundGermanMarkFrenchFrancUSDPeggedat$35/ozGold12BrettonWoodsSystem:

1945-1972UndertheBrettonWoodssystem,theU.S.dollarwaspeggedtogoldat$35perounceandothercurrencieswerepeggedtotheU.S.dollar.Eachcountrywasresponsibleformaintainingitsexchangeratewithin±1%to±2.25%oftheadoptedparvaluebybuyingorsellingforeignreservesasnecessary.TheBrettonWoodssystemwasadollar-basedgoldexchangestandard.13BrettonWoodsSystem:

1945-1972CollapseoftheSystemTriffinParadoxTherapiddevelopmentofGermany,FranceandJapan14BrettonWoodsSystem:

1945-1972TheprocessofthecollapseofthesystemThefirstDollarcrisis:1960ThecreationoftheSwapAgreement,andtheGoldPoolThesecondDollarcrisis:1968Thetwo-tiergoldpricesystem,andThecreationofSDRThethirdDollarcrisis:1971ThecreationoftheSmithsonnianAgreement15TheFlexibleExchangeRateRegime:1973-Present.TheflexibleexchangerateregimewasratifiedafterthesettlementoftheJamaicaAgreementin1976.FlexibleexchangerateweredeclaredtoIMFmembers,andcentralbankswereallowedtointerveneintheexchangemarket.Goldwasofficiallyabandonedasaninternationalreserve.Non-oil-exportingcountriesandlessdevelopedcountriesweregivengreataccesstoIMFfunds.1617TheFlexibleExchangeRateRegime:1973-Present.PlazaAccord:InSept.1985,theso-calledG5countriesreachedPlazaAccord.TheyagreedthatitwouldbedesirableforthedollartodepreciateagainstmostmajorcurrenciestosolvetheUStradedeficit.LouvreAccord:Toaddresstheproblemofexchangeratevolatility,theG-7countriessignedtheLouvreAccord.Thismarkedtheinceptionofthemanaged-floatsystem.18CurrentExchangeRateArrangementsTheFixedThefloatingFreefloatingManagedfloatingThePeggedSystemCurrencyBoardPeggedwithincrawlingbandsPeggedwithinhorizontalbands…..19CurrentExchangeRateArrangementsFixedExchangeratesareeitherheldconstantorallowedtofluctuatewithinverynarrowboundaries.ExamplesareMorocco,SaudiArabia,andUkraine.20CurrentExchangeRateArrangementsTheFloatingFreeFloat:Theexchangerateismarketdetermined,withanyforeignexchangeinterventionaimedatmoderatingtherateofchangeandpreventingunduefluctuationsintheexchangerateratherthanatestablishingalevelforit.ExamplesincludetheUS,theUK,Japan,Canada,Australia,Switzerland,Korea,andMexico.ManagedFloat:Themonetaryauthorityinfluencesthemovementsoftheexchangeratethroughactiveinterventionintheforeignexchangemarketwithoutspecifyingapreanouncedpathfortheexchangerate.ExamplesareChina,Singapore,Russia,Thailand,India.etc.21CurrentExchangeRateArrangementsTheCurrencyboardarrangement:Amonetaryregimebasedonanexplicitlegislativecommitmenttoexchangedomesticcurrencyforaspecifiedforeigncurrencyatafixedexchangerate,combinedwithrestrictionsontheissuingauthoritytoensurethefulfillmentofitslegalobligation.ExamplesareChina-HongKongSARfixedtotheUSD;andEstoniafixedtoEuro.22FixedversusFlexible

ExchangeRateRegimesArgumentsinfavoroffixedexchangeratesystem:Lessforeignexchangerisk,helpfultoforeigntradeandinvestment.ArgumentsAGAISTfixedexchangeratesystemexposuretocurrencycrisiseasytransmissionofinflationLossofmonetarypolicyautonomy

23FixedversusFlexible

ExchangeRateRegimesArgumentsinfavorofflexibleexchangerates:Easierexternaladjustments.Nationalpolicyautonomy.SpeculationavoidanceArgumentsagainstflexibleexchangerates:Exchangerateuncertaintymayhamperinternationaltrade.Nosafeguardstopreventcrises.24FixedversusFlexible

ExchangeRateRegimesThedisadvantageofthepeggingsystem:Thecountry’seconomyishighlyinfluencedbythepeggedcountry.25QuestionQustion1TheHongKongDollar’svalueispeggedtotheU.S.Dollar.ExplainhowthefollowingpatternswouldbeaffectedbyappreciationintheJapaneseYenagainstU.S.dollar:(a)HongKongexportstoJapan(b)HongKongexportstotheUnitedStates.26Whatamonetarysystemshouldacountryadopt？TheTrilemmabyMundell:Whenmoneycanmovefreelyacrossborders,policymarkersmustchoosebetweenexchange-ratestabilityandanindependentmonetarypolicy.Theycan’thaveboth.27CurrentExchangeRateArrangements

Liquidity

Confidence

Adjustment28TheTheoryoftheOptimumCurrencyAreasThetheoryfoundedbyProfessorRobertMundellholdsthattherelevantcriterionforidentifyinganddesigningacommoncurrencyisthedegreeoffactor(capitalandlabor)mobilitywithinthezone;ahighdegreeoffactormobilitywouldprovideanadjustmentmechanism,providinganalternativetocountry-specificmonetaryadjustment.2930TheMapofEurope3030TheProcessofEuropeanMonetaryUnionTheWernerReport:1969TheSnakefloatingSystem:TheestablishmentoftheEuropeanUnitofAccountTheEuropeanMonetarySystemsetupin1979EuropeancurrencyunitEuropeanmonetaryfundTheMaastrichtTreatysignedin1991IntroduceacommoncurrencyTheEuropeancentralbank,tobelocatedinFrankfurt,GermanywillconductmonetarypolicyintheEuropeanUnion.31TheBenefitsofEuropeanMonetaryUnionSavingTransactioncostsEliminationofforexuncertaintyPromotingcorporaterestructuringviamergerandacquisitions.CreatingconditionsconducivetocontinentalcapitalmarketsPoliticalcooperationandpeaceinEurope.32TheCostOfInternationalMonetaryUmionLossofnationalmonetarypolicyindependence.33TheAsianCurrencyCrisis

Thethreecurrencycrisisinthe1990thTh