20. international economic policy
-
Upload
ashish-gupta -
Category
Education
-
view
72 -
download
2
Transcript of 20. international economic policy
![Page 1: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/1.jpg)
International
Economic Policy
![Page 2: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/2.jpg)
International Fluctuations
• International business cycles– international financial interdependence– international trade multiplier– the desirability of co-ordinating national
macroeconomic policies
• The growing volatility of exchange rates– increased stock of capital– increased mobility of capital– growth in speculation– adoption of domestic macro targets– conflicts in policies between countries
![Page 3: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/3.jpg)
• The G7/G8 meetings
– problem of divergence of economies
International Harmonisation of Economic Policies
![Page 4: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/4.jpg)
Macroeconomic indicators for the G7 countries
![Page 5: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/5.jpg)
Macroeconomic indicators for the G7 countries
![Page 6: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/6.jpg)
Macroeconomic indicators for the G7 countries
![Page 7: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/7.jpg)
Macroeconomic indicators for the G7 countries
![Page 8: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/8.jpg)
Macroeconomic indicators for the G7 countries
![Page 9: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/9.jpg)
Macroeconomic indicators for the G7 countries
![Page 10: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/10.jpg)
Macroeconomic indicators for the G7 countries
![Page 11: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/11.jpg)
Macroeconomic indicators for the G7 countries
![Page 12: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/12.jpg)
Macroeconomic indicators for the G7 countries
![Page 13: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/13.jpg)
International Harmonisation of Economic Policies
• Difficulties in harmonising policy
– convergence in one objective may lead to divergence in another
– conflicting policy objectives
– unwillingness of countries to gear domestic policies to international objectives
– G8 policies are not binding
• Reactions to SE Asian crisis of 1997/8
• The future for co-operation
![Page 14: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/14.jpg)
European Economic and Monetary Union
• The ERM
– features of the ERM
– the 1980s
– crisis in the ERM
• events of 1992
• events of 1993
– a return of calm
![Page 15: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/15.jpg)
European Economic and Monetary Union
• The Maastricht Treaty– the timetable for EMU
– the convergence criteria• inflation
• interest rates
• budget deficits
• general government debt
• exchange rates
• Birth of the euro–meeting the convergence criteria
– role of the European Central Bank (ECB)
![Page 16: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/16.jpg)
• How desirable is EMU?– Advantages of a single currency• eliminating conversion costs• increased competition and efficiency• elimination of exchange-rate uncertainty• increased inward investment• lower inflation and interest rates
– Disadvantages of EMU• political arguments• adjustment to shocks
– problem of asymmetric shocks
• EU12 may not be an optimal currency area• regional problems
European Economic and Monetary Union
![Page 17: 20. international economic policy](https://reader033.fdocuments.us/reader033/viewer/2022042817/55a673f31a28ab473c8b467b/html5/thumbnails/17.jpg)
Policies for Achieving Currency Stability
• The size of currency flows across the international exchanges
• Controlling exchange transactions?– capital controls
– transactions tax ('Tobin' tax)
– non-interest-bearing deposits
• Objections to controls
• Exchange-rate target zones– varieties of adjustable and movable pegs
– advantages and problems