"Montiels book is indispensable for anyone wishing to deepen their understanding of International Macroeconomics. It presents a much more realistic picture than what is provided by other textbooks.

An introduction to the impact of globalization on macroeconomics. It presents a unified macroeconomic model to examine international macroeconomics and then focuses this model on historic cases, institutions, and specific countries, dealing with various types of macroeconomic crises.

Autorentext

Peter J. Montiel is the Farleigh S. Dickinson '41 Professor of Economics at Williams College, and received his PhD from MIT. He has served as a Senior Policy Advisor at the IMF as well as Chief of the Macroeconomics and Growth Division of the Policy Research Department of the World Bank, and has provided expert counsel to a variety of regional development banks and central banks. He is the author of several books, including Development Macroeconomics, 3rd edition (with Richard Agenor, 2008) and Macroeconomics in Emerging Markets (2nd edition forthcoming), and numerous articles on international macroeconomics.

Klappentext

International Macroeconomics provides students with an analytically rigorous introduction to the impact of globalization on macroeconomics. * Presents an analytically rigorous introduction to the field and uniquely includes optional econometric studies * Provides a unified macroeconomic model to examine rigorously international macroeconomics and then focuses this model on historic cases, institutions, and specific countries, dealing with various types of macroeconomic crises * Provides a strong policy orientation by an author who worked for many years at the IMF * Is supported by a website with extensive solutions for the problem sets, PowerPoint slides, and an update on the 08-09 meltdown

Inhalt

Preface ix

Part 1 Foundations 1

1 An Overview of the Book 3

1.1 What is International Macroeconomics? 4

1.2 The International Macroeconomics Toolkit 9

1.3 The Contents of this Book 10

1.4 Summary 15

2 Open-economy Macroeconomic Accounting 17

2.1 The Balance of Payments Accounts 18

2.2 Sub-accounts in the Balance of Payments 22

2.3 Basic BOP Facts for the United States 29

2.4 The NIPA in an Open Economy: Aggregate Identities 31

2.5 Sectoral Identities 37

2.6 Summary 41

3 Macroeconomic Influences on the Foreign Exchange Market 46

3.1 Exchange Rate Concepts 47

3.2 Supply and Demand for Foreign Exchange 50

3.3 Relative Prices of Domestic and Foreign Goods: The Real Exchange Rate 52

3.4 Relative Returns on Domestic and Foreign Assets: Interest Parity Conditions 63

3.5 Central Bank Intervention in the Foreign Exchange Market: Exchange Rate Regimes 70

3.6 Summary 77

Appendix 3.1 Properties of Logarithms 80

4 The Macroeconomic Framework 82

4.1 Production Structure and Economic Agents 84

4.2 Equilibrium in the Market for Financial Assets 85

4.3 Equilibrium in the Market for Domestic Goods 91

4.4 Equations and Unknowns: Imposing Additional Structure 100

4.5 Summary 108

Appendix 4.1 The Marshall-Lerner Condition 109

Appendix 4.2 The Framework in Log-Linear Form 110

Part 2 Fixed Exchange Rates 113

5 The Classical Gold Standard 115

5.1 Evolution of the International Gold Standard 116

5.2 Central Bank Behavior under the Gold Standard 120

5.3 Summary 127

6 Gold Standard Macroeconomics 129

6.1 Short-Run Macroeconomics under the Gold Standard 130

6.2 Short-Run Comparative Statics 139

6.3 The Long-run Model 145

6.4 The Gold Standard as an International Monetary System 148

6.5 Summary 155

Appendix 6.1 The Gold Standard with Zero Capital Mobility 157

7 The Bretton Woods System 159

7.1 Evolution of the Bretton Woods System 160

7.2 Modeling Soft Pegs with Imperfect Capital Mobility 164

7.3 The Bond Market Equilibrium (BB) Curve 167

7.4 Properties of the BB Curve 169

7.5 Summary 174

8 Macroeconomics under ''Soft'' Pegs and Imperfect Capital Mobility 177

8.1 Solving the Model 178

8.2 Comparative Statics 180

8.3 Bretton Woods as an International Monetary System 187

8.4 Summary 199

Appendix 8.1 Alternative Monetary Policy Regimes 202

9 Fixed Exchange Rates in a Financially Integrated World: Currency Crises and ''Hard'' Pegs 208

9.1 Soft Pegs with High Capital Mobility 209

9.2 Currency Crises 216

9.3 Financial Integration and Crises 219

9.4 Modern Versions of Hard Pegs 225

9.5 Soft Versus Hard Pegs: Some Policy Issues 228

9.6 Summary 233

Appendix 9.1 The Monetary Approach to the Balance of Payments (MABP) 236

Part 3 Floating Exchange Rates 239

10 Floating Exchange Rates I: Transitory Shocks 241

10.1 Analytical Framework 242

10.2 Solving the Floating Exchange Rate Model 245

10.3 Comparative Statics 252

10.4 Summary 265

Appendix 10.1 The Asset Market Approach to the Exchange Rate 268

Appendix 10.2 Algebraic Solution of the Log-linear Model 269

Appendix 10.3 Interest Rate Targeting under Floating Exchange Rates 270

11 Floating Exchange Rates II: Intermediate and Permanent Shocks 272

11.1 Anticipated Future Shocks 273

11.2 Multi-period Shocks 279

11.3 Permanent Shocks 284

11.4 Comparing Permanent and Transitory Shocks 291

11.5 Summary 296

12 Floating Exchange Rates III: Exchange Rate Dynamics 299

12.1 Asymmetric Adjustment in Goods and Asset Markets 300

12.2 The Dornbusch Overshooting Model 301

12.3 Comparative Statics 306

12.4 Generalizing the Model 310

12.5 Summary 315

Appendix 12.1 Proof that 317

13 Long-run Equilibrium under Floating Exchange Rates 319

13.1 A Long-run Model 320

13.2 Solving the Long-run Model 325

13.3 Comparative Statics 327

13.4 Comparing the Short-run and Long-run Responses to Permanent Shocks 331

13.5 The Role of Long-run Inflation 333

13.6 Summary 338

Appendix 13.1 The Long-run Floating Rate Model in Log-linear Form 340

Appendix 13.2 Fixed Exchange Rates in the Long Run 342

14 Floating Exchange Rates with Short-run Price Flexibility 346

14.1 A ''Flexprice'' Model 347

14.2 Real Exchange Rate Dynamics 348

14.3 The Monetary Approach to the Exchange Rate 353

14.4 Currency Crises Revisited 358

14.5 Gradual Price Adjustment 364

14.6 Summary 369

15 Choosing an Exchange Rate Regime 372

15.1 Optimality Criterion I: Minimizing the Costs of Making International Transactions 373

15.2 Optimality Criterion II: Long-run Inflation Stabilization 377

15.3 Optimality Criterion III: Short-run Macroeconomic Stability 382

15.4 Weighing Optimality Criteria 389

15.5 Summary 391

Part 4 International Monetary Cooperation 395

16 The International Financial Architecture 397

16.1 The International Monetary System after Bretton Woods 399

16.2 The International Debt Crisis 400

16.3 Changes in the International Macroeconomic Environment in the 1990s 404

16.4 Proposals for Reforming the International Financial Architecture 409

16.5 Summary 414

17 G-8 Policy Coordination 416

17.1 Why Coordinate? Theory 417

17.2 Comparative Statics 426

17.3 Post-Bretton Woods International Policy Coordination among the G-8 Countries 430

17.4 The US Current Account Deficit in the 2000s 435

17.5 Summary 438

18 Monetary Unification 441

18.1 Economic Integration in Western Europe 442

18.2 European Monetary Integration 446

18.3 Monetary Union in West Africa 453

18.4 The Eastern Caribbean Currency Union 457

18.5 Summary 460

Part 5 The New International Macroeconomics 465

19 Intertemporal Issues in International Macroeconomics 467

19.1 A Simple One-Good Model 468

19.2 A Two-Good Model 476

19.3 Introducing the Government 480

19.4 Summary 485

Index 487