ADM 2341 Lecture Notes - Lecture 4: Floating Exchange Rate, Fixed Exchange-Rate System, Bretton Woods System
9 Mar 2016
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Document Summary
Meaning of the international monetary system . Floating exchange rate: regged exchange rate, dirty-float system. The role of the world bank (p. 330) The collapse of the fixed exchange rate system. The case for floating exchange rates: monetary policy autonomy, trade balance adjustments. The case for fixed exchange rates: monetary discipline, speculation, uncertainty, trade balance adjustments. Exchange rate regime in practice: regged exchange rates, currency boards. Crisis management by the imf: currency crisis, banking crisis, foreign debt crisis. Serious economic and financial crisis quite common over the past 2 decades. Recent (2008) crisis most serious and widespread i. e. global, since the great depression. The most recent crisis enormously costly: unemployment (disguised, discouraged, loss of wealth, precarious fiscal picture for most countries (states, local government, setback to globalization, trade friction. Usa, china, japan, uk, etc collectively the most widespread and biggest fiscal effort to prevent full-blown depression, but need for new ways of co-operation evident g-20.
