[...]... Market: Performance and Policy Problems The International Capital Market and the Gains from Trade Three Types of Gain from Trade Risk Aversion Portfolio Diversification as a Motive for International Asset Trade The Menu of International Assets: Debt Versus Equity International Banking and the International Capital Market The Structure of the International Capital Market Growth of the International Capital... Dominance and the Credibility Theory of the EMS The EU "1992" Initiative European Economic and Monetary Union The Euro and Economic Policy in the Euro Zone The Maastricht Convergence Criteria and the Stability and Growth Pact The European System of Central Banks Box: Designing and Naming a New Currency The Revised Exchange Rate Mechanism The Theory of Optimum Currency Areas Economic Integration and the... covered in class and the exciting issues that dominate current research and policy debates That gap has widened dramatically as the importance of international economic problems and enrollments in international economics courses— have grown This book is our attempt to provide an up-to-date and understandable analytical framework for illuminating current events and bringing the excitement of international. .. the analytical theory of international trade, and Part Two (Chapters 8 through 11) applies trade theory to the analysis of government policies toward trade The second half of the book is devoted to international monetary issues Part Three (Chapters 12 through 17) develops international monetary theory, and Part Four (Chapters 18 through 22) applies this analysis to international monetary policy ... Employment and Price-Level Stability External Balance: The Optimal Level of the Current Account International Macroeconomic Policy under the Gold Standard, 1870-1914 Origins of the Gold Standard External Balance under the Gold Standard The Price-Specie-Flow Mechanism The Gold Standard "Rules of the Game": Myth and Reality Box: Hume versus the Mercantilists Internal Balance under the Gold Standard Case... Fiscal Policy Monetary Policy Fiscal Policy Policies to Maintain Full Employment Inflation Bias and Other Problems of Policy Formulation Permanent Shifts in Monetary and Fiscal Policy A Permanent Increase in the Money Supply Adjustment to a Permanent Increase in the Money Supply A Permanent Fiscal Expansion Macroeconomic Policies and the Current Account Box: The Dollar Exchange Rate and the U.S Economic... Currencies in the World Monetary System The Mechanics of a Reserve Currency Standard The Asymmetric Position of the Reserve Center The Gold Standard The Mechanics of a Gold Standard Symmetric Monetary Adjustment under a Gold Standard Benefits and Drawbacks of the Gold Standard The Bimetallic Standard The Gold Exchange Standard Summary 486 487 488 489 490 508 510 510 511 512 512 513 513 514 515 516... how the development of international economic theory has traditionally been shaped by the need to understand the changing world economy and analyze actual problems in international economic policy We found that published textbooks did not adequately meet these challenges Too often, international economics textbooks confront students with a bewildering array of special models and assumptions from which... The Demand for Money by Individuals Expected Return Risk Liquidity 358 358 358 358 359 -359 359 360 360 361 Aggregate Money Demand The Equilibrium Interest Rate: The Interaction of Money Supply and Demand 361 362 Equilibrium in the Money Market Interest Rates and the Money Supply Output and the Interest Rate The Money Supply and the Exchange Rate in the Short Run Linking Money, the Interest Rate, and. .. leave students wondering why the principles underlying their work on trade theory have been discarded over the winter break Some Distinctive Features of International Economics: Theory and Policy This book covers the most important recent developments in international economics without shortchanging the enduring theoretical and historical insights that have traditionally formed the core of the subject