PolicyandCoordination(国际金融(香港大学,WONG

1MacroeconomicPolicyandCoordinationUnderFloatingExchangeRatesWONGKaFu19March20012Goldstandard1870-1914Centralbankspegthepricesoftheircurrenciesintermsofgold,andholdgoldasofficialinternationalreserves.Exchangeratesamongcountriesarefixedduetoarbitrage.3GoldCountry1Country2Country34AdvantageofgoldstandardLimittheextenttowhichthecentralbankscancauseincreaseinnationalpricelevelsthroughexpansionarymonetarypolicies.Theselimitsmaketherealnationalmoniesmorestableandpredictable,therebyenhancingthetransactioneconomiesarisingfromtheuseofmoney.5DisadvantageofgoldstandardConstraintstheuseofmonetarypolicytofightunemploymentTyingcurrencyvaluestogoldensuresastableoverallpricelevelonlyiftherelativepriceofgoldandothergoodsandservicesisstable.6HistoricalBackgroundGreatDepressionin1930sunemploymentdeflationbankfailureLackofconfidenceinpapermoneyDemandforgoldincreasedbutnationaltreasuriescouldnotsupply7GoldstandardcollapsedUnitedKingdomandsomecountriesforcedtoabandonthegoldstandardTheamountandfrequencyofmonetarytransactionsbetweennationscontractedbecauseTheuncertaintyaboutthevalueofmoneythatnolongerboreafixedrelationtogoldNationshoardedgoldandmoneythatcouldbeconvertedintogoldRevertedtobarterexchange.8CompetitivedevaluationOthergovernments,desperatetofindforeignbuyersfordomesticagriculturalproducts,madetheseproductsappearcheaperbysellingtheirnationalmoneybelowitsrealvaluesoastoundercutthetradeofothernationssellingthesameproducts.Tradingrivalsretaliatesthroughsimilardevaluation9Goldstandardcollapsed:ResultBetween1929and1932pricesofgoodsfellby48percentworldwide,andthevalueofinternationaltradefellby63percent.10LessonConvertibilityofcurrenciesfromonetotheotherisanimportantelementforinternationaltradeandeconomicdevelopment11AproposalbyHarryDexterWhiteintheUSJohnMaynardKeynesintheUKNeedtoestablishamonetarysystemandaninternationalinstitutiontomonitorthemonetarysystemThesystemaimsatencouragingtheunrestrictedconversionofonecurrencyintoanother,establishingaclearandunequivocalvalueforeachcurrency,andeliminatingrestrictionsandpractices,suchascompetitivedevaluation12ThebirthofIMFJuly1–22,1944BrettonWoods,NewHampshire,U.S.A.Thedelegatesof44nationsnegotiatedforestablishingtheInternationalMonetaryFundDecember27,1945ArticlesofAgreemententerintoforceuponsignatureby29governmentsMay6,1946BeganoperationwhentwelveExecutiveDirectorsfiveappointedandsevenelectedholdinauguralmeetinginWashington.13Gold-exchangestandardorBrettonWoodsSystemAdoptedin1944.Thevalueofeachcurrencywasexpressedintermsofgold(parvalue),andmemberswereobligedtokeeptheexchangeratesfortheircurrencieswithin1percentofparity.14TwomajorelementsConvertibilityoftheUSdollartogold:TheUnitedStatesdefinedthevalueofitsdollarintermsofgold,sothatoneounceofgoldwasequaltoexactly$35.TheU.S.governmentstoodbehindthisdefinitionandwouldexchangegoldfordollarsatthatrateondemand.ParvaluesAllothermembershadtodefinetheexchangevalueoftheirmoneyintermsofgoldorintermsoftheU.S.dollar(oftheweightandfinenessineffectonJuly1,1944).Memberskeptthevalueoftheirmoneywithin1percentofthisparvalueanycontemplatedchangeshouldbefirstdiscussedwithothermembersintheforumoftheIMFandobtainedtheirconsentbeforeimplementingthenewparvalue.15Country1Country2Country3Gold16ReservecurrencyBetweentheendofWorldWarIIand1973,theU.S.dollarwasthemainreservecurrencyandalmosteverycountrypeggedtheircurrencytotheU.S.dollar.Exchangeratesamongcountriesarefixedduetoarbitrage.17Theasymmetricpositionofthereservecenter(3countries)AssumethreecountriesandthreecurrenciesintheworldCountry1isthereservecenterifbothcountry2andcountry3pegtheircurrenciestocountry1’s.Country1isalsopegto2&3,butonlypassively.I.e.,countries2and3havetointervenetheforeignexchangemarkettokeeptheirratefixedtocountry1’s.18Country1Country2Country319TheasymmetricpositionofthereservecenterBut,country1needdonointerventionintheforexmarketandisfreetosetitsmonetarypolicy.20Ifcountry1expandsitsmoneysupplyCountry1’sinterestratefalls.Tomaintainthefixedrate,bothcountries2and3havetobuyreserveassetswiththeirowncurrencies,expandingtheirmoneysuppliespushingtheirinterestratedowntothelevelestablishedbythereservecenter.Outputthroughouttheworld(allthecountries)wouldexpand.21Theasymmetricpositionofthereservecenter(Ncountries)AssumeNcountriesandNcurrenciesintheworldCountry1isthereservecenterifallotherN-1countriespegtheircurrenciestocountry1’s.I.e.,allN-1countrieshavetointervenetheforeignexchangemarkettokeeptheirratefixedtocountry1’s.22Ifcountry1expandsitsmoneysupplyCountry1’sinterestratefalls.Tomaintainthefixedrate,allotherN-1countrieshavetobuyreserveassetswiththeirowncurrencies,expandingtheirmoneysuppliespushingtheirinterestratedowntothelevelestablishedbythereservecenter.Outputthroughouttheworld(allthecountries)wouldexpand.23TheasymmetricpositionofthereservecenterAllothercountrieshavetopassivelyimportthemonetarypolicyofthereservecenterbecauseoftheircommitmenttopegtheircurrenciestothereservecurrency.Country1canindependentlychooseitsmonetarypol