CHAPTER 2 THE INTERNATIONAL MONETARY SYSTEM Chapter Objectives: System Chapter Objectives: System 12/19/2010 B02013 - The international Monetarysystem 1... Bimetallism: Before 1875• A “d
Trang 1CHAPTER 2 THE INTERNATIONAL MONETARY
SYSTEM
Chapter Objectives:
System
Chapter Objectives:
System
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Trang 21 Evolution of the International Monetary System
• Bimetallism: Before 1875
• Classical Gold Standard: 1875-1914
• Interwar Period: 1915-1944
• Bretton Woods System: 1945-1972
• The Flexible Exchange Rate Regime:
1973-Present
• Bimetallism: Before 1875
• Classical Gold Standard: 1875-1914
• Interwar Period: 1915-1944
• Bretton Woods System: 1945-1972
• The Flexible Exchange Rate Regime:
1973-Present
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Trang 31.1 Bimetallism: Before 1875
• A “double standard” in the sense that both gold and silver were used as money
• Both gold and silver were used as international means of payment and the exchange rates
among currencies were determined by either
their gold or silver contents
• A “double standard” in the sense that both gold and silver were used as money
• Both gold and silver were used as international means of payment and the exchange rates
among currencies were determined by either
their gold or silver contents
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Trang 41.2 Classical Gold Standard: 1875-1914
• During this period in most major countries
• The exchange rate between two country’s
currencies would be determined by their relative gold contents
• During this period in most major countries
• The exchange rate between two country’s
currencies would be determined by their relative gold contents
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Trang 51.3 Interwar Period: 1915-1944
• Exchange rates fluctuated as countries widely
used “predatory” depreciations of their
currencies as a means of gaining advantage in the world export market
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Trang 61.4 The Bretton Woods system
• Under the Bretton Woods system, the U.S dollar was pegged to gold at $35 per ounce and other currencies were pegged to the U.S dollar
• The Bretton Woods system was a dollar-based gold exchange standard
• Under the Bretton Woods system, the U.S dollar was pegged to gold at $35 per ounce and other currencies were pegged to the U.S dollar
• The Bretton Woods system was a dollar-based gold exchange standard
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Trang 71.5.The Flexible Exchange Rate Regime: 1973-Present
• Flexible exchange rates were declared
acceptable to the IMF members
• Gold was abandoned as an international
reserve asset
• Flexible exchange rates were declared
acceptable to the IMF members
• Gold was abandoned as an international
reserve asset
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Trang 82 International institutions systems
2.1.The financial institutions:
• Stock market
• All funds: superannuation, Mutual Funds…
• Banks
• Financial institutions of government
2.1.The financial institutions:
• Stock market
• All funds: superannuation, Mutual Funds…
• Banks
• Financial institutions of government
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Trang 92.2 International institutions:
- Eurocurrency market
- Bank for international settlements
- World Bank
- International Finance Corporation
- International Development Association (IDA)
- International Monetary Fund (IMF)
- Asian Development Bank
2.2 International institutions:
- Eurocurrency market
- Bank for international settlements
- World Bank
- International Finance Corporation
- International Development Association (IDA)
- International Monetary Fund (IMF)
- Asian Development Bank
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Trang 103 International financial adjustment
3.1 Structural Adjustment Facilities.
3.2 The Basel Committee on Banking
Supervision
3.3 International banking facilities (IBF)
3.4 IMF conditionality
3.1 Structural Adjustment Facilities.
3.2 The Basel Committee on Banking
Supervision
3.3 International banking facilities (IBF)
3.4 IMF conditionality
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Trang 11Mini-Case Questions: The Revaluation of
the Chinese Yuan
• Many Chinese critics had urged China to revalue the yuan by 20% or more What would the
Chinese yuan’s value be in US dollars if it had
indeed been devalued by 20%?
• Do you believe that the revaluation of the
Chinese yean was politically or economically
motivated?
• Many Chinese critics had urged China to revalue the yuan by 20% or more What would the
Chinese yuan’s value be in US dollars if it had
indeed been devalued by 20%?
• Do you believe that the revaluation of the
Chinese yean was politically or economically
motivated?
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