宏观经济管理学与财务知识分析(ppt 58页)

• Under a gold standard, foreign-currency earnings can also be used to purchase gold from the foreign country’s Treasury
N N X- F G I 0
• If a country’s net exports plus net foreign investment are less than zero, its Treasury will find itself losing gold
• The gold standard was suspended during World War I • After the war ended, politicians and central bankers sought to restore it
• they believed it was an important step in restoring prosperity
• Three principles guided this system
• in ordinary times, exchange rates should be fixed • in extraordinary times, exchange rates should be changed • an institution was needed to watch over the international financial system
N X NF 0 I
• The exchange rate moves up or down in response to the supply and demand for foreign exchange in order to make it so
Weaknesses of the Gold Standard
The Gold Standard
• Example of currency arbitrage
• the U.S. government is willing to buy gold at $35 per ounce • the British government is willing to buy gold at £15.58333 per ounce • the pound trades for $2.64 (10% higher than the ratio of the gold parities - $2.40)
Figure 15.3 - Economic Performance and Degree of Exchange Rate Depreciation During the Great Depression
The Bretton Woods System
• The Bretton Woods System was the result of an international monetary conference that took place in 1944
– the country’s gold reserves shrink
Weaknesses of the Gold Standard
• If a country’s gold reserves are shrinking, it has a choice
• abandon the fixed exchange rate system • make it more attractive for foreigners to invest by raising domestic interest rates
The Gold Standard
• Before World War I, nearly all of the world economy was on the gold standard
•a government would define a unit of its currency as worth a particular amount of gold
• the currency was convertible
• could be converted into gold freely
• the currency’s price in terms of gold was its parity
Figure 15.2 - Growth of the Gold Standard
• puts contractionary pressure on the economy
• Countries gaining gold face no incentive to lower interest rates in order to stay on the gold standard
Collapse of the Gold Standard
• it never provided a countervailing push to other countries to lower their interest rates
Weaknesses of the Gold Standard
• If the exchange rate is floating, foreigners’ domestic currency earnings must be used to buy exports or to invest in the home country
• After the Great Depression began, the gold standard broke apart
Collapse of the Gold Standard
• Four factors made the gold standard a less secure monetary system
The Gold Standard
• When two countries were on the gold standard, their nominal exchange rate was fixed at the ratio of their gold parities
• at World War II parities
Collapse of the Gold Standard
• Four factors made the gold standard a less secure monetary system
– after World War I, countries held their reserves in foreign currencies rather than gold
– the post-war surplus economies did not lower interest rates as gold flowed in
Collapse of the Gold Standard
• As soon as a recession hit, governments found themselves under pressure to raise interest rates and lower output
exchange rates?
Questions
• Why do most countries today have floating exchange rates? • Why has western Europe recently created a “monetary union”--an
irrevocable commitment to fixed exchange rates within western Europe? • What were the causes of the three major currency crises of the 1990s?
• the International Monetary Fund (IMF)
The Bretton Woods System
• The Bretton Woods System broke down in the early 1970s
• the U.S. found itself with a large trade deficit and sought to devalue its currency
CHAPTER 15
International Economic Policy
Questions
• How has the world organized its international monetary system? • What is a fixed exchange rate system? • What is a floating exchange rate system? • What are the costs and benefits of fixed exchange rates vis-à-vis floating
is completed
Figure 15.1 - How to Profit in the Foreign-Exchange Market
Weaknesses of the Gold Standard
• The gold standard tended to be deflationary
• under some circumstances, it pushed countries to raise their interest rates which reduced output and increased unemployment
• the U.S. dollar was equal to 1/35 of an ounce of gold • the British pound sterling was set to equal 1/15.58333 ounces of gold • the exchange rate of the dollar for the pound was £1.00=$2.40