International Economics : Theory and Policy (Pearson Series in Economics) (10TH)

International Economics : Theory and Policy (Pearson Series in Economics) (10TH)

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  • 製本 Hardcover:ハードカバー版/ページ数 753 p.
  • 言語 ENG
  • 商品コード 9780133423648
  • DDC分類 337

Full Description


For courses in International Economics, International Finance, and International TradeA balanced approach to theory and policy applicationsInternational Economics: Theory and Policy provides engaging, balanced coverage of the key concepts and practical applications of the two main topic areas of the discipline. For both international trade and international finance, an intuitive introduction to theory is followed by detailed coverage of policy applications. With this new tenth edition, the author team of Nobel Prize-winning economist Paul Krugman, renowned researcher Maurice Obstfeld, and Marc Melitz of Harvard University continues to set the standard for International Economics courses.This program provides a better teaching and learning experience-for you and your students. It will help you to:* Personalize learning with MyEconLab: This online homework, tutorial, and assessment program fosters learning and provides tools that help instructors to keep students on track.* Reveal theory and applications of trade and finance via a unified structure: Balanced coverage of theory and applications aids student retention and highlights the relevance of course material.* Give students learning tools to master course material: Numerous in-text learning resources engage students and encourage further exploration of course topics.* Provide the most updated coverage: Thoroughly updated content ensures that students are up to date on key economics issues.Note: If you are purchasing the standalone text or electronic version, MyEconLab does not come automatically packaged with the text. To purchase MyEconLab please visit www.myeconlab.com or you can purchase a package of the physical text + MyEconLab by searching for 0133826945 / 9780133826944. MyEconLab is not a self-paced technology and should only be purchased when required by an instructor.

Table of Contents

Preface                                            xxiii
1 Introduction 1 (9)
What Is International Economics About? 3 (5)
The Gains from Trade 4 (1)
The Pattern of Trade 5 (1)
How Much Trade? 5 (1)
Balance of Payments 6 (1)
Exchange Rate Determination 6 (1)
International Policy Coordination 7 (1)
The International Capital Market 8 (1)
International Economics: Trade and Money 8 (2)
Part 1 International Trade Theory 10 (196)
2 World Trade: An Overview 10 (14)
Who Trades with Whom? 10 (6)
Size Matters: The Gravity Model 11 (2)
Using the Gravity Model: Looking for 13 (1)
Anomalies
Impediments to Trade: Distance, Barriers, 14 (2)
and Borders
The Changing Pattern of World Trade 16 (5)
Has the World Gotten Smaller? 16 (2)
What Do We Trade? 18 (1)
Service Offshoring 19 (2)
Do Old Rules Still Apply? 21 (1)
Summary 22 (2)
3 Labor Productivity And Comparative 24 (27)
Advantage: The Ricardian Model
The Concept of Comparative Advantage 25 (1)
A One-Factor Economy 26 (3)
Relative Prices and Supply 28 (1)
Trade in a One-Factor World 29 (8)
Determining the Relative Price after Trade 30 (4)
Box: Comparative Advantage in Practice: 33 (1)
The Case of Babe Ruth
The Gains from Trade 34 (1)
A Note on Relative Wages 35 (2)
Box: The Losses from Nontrade 36 (1)
Misconceptions about Comparative Advantage 37 (3)
Productivity and Competitiveness 37 (1)
Box: Do Wages Reflect Productivity? 38 (1)
The Pauper Labor Argument 38 (1)
Exploitation 39 (1)
Comparative Advantage with Many Goods 40 (4)
Setting Up the Model 40 (1)
Relative Wages and Specialization 40 (2)
Determining the Relative Wage in the 42 (2)
Multigood Model
Adding Transport Costs and Nontraded Goods 44 (1)
Empirical Evidence on the Ricardian Model 45 (3)
Summary 48 (3)
4 Specific Factors And Income Distribution 51 (33)
The Specific Factors Model 52 (11)
Box: What Is a Specific Factor? 53 (1)
Assumptions of the Model 53 (1)
Production Possibilities 54 (3)
Prices, Wages, and Labor Allocation 57 (4)
Relative Prices and the Distribution of 61 (2)
Income
International Trade in the Specific Factors 63 (1)
Model
Income Distribution and the Gains from Trade 64 (3)
The Political Economy of Trade: A 67 (3)
Preliminary View
Income Distribution and Trade Politics 68 (12)
Case Study: Trade and Unemployment 68 (2)
International Labor Mobility 70 (6)
Case Study: Wage Convergence in the Age 72 (1)
of Mass Migration
Case Study: Immigration and the U.S. 73 (3)
Economy
Summary 76 (4)
Appendix: Further Details on Specific 80 (4)
Factors
Marginal and Total Product 80 (1)
Relative Prices and the Distribution of 81 (3)
Income
5 Resources And Trade: The Heckscher-Oh Lin 84 (34)
Model
Model of a Two-Factor Economy 85 (9)
Prices and Production 85 (4)
Choosing the Mix of Inputs 89 (1)
Factor Prices and Goods Prices 90 (2)
Resources and Output 92 (2)
Effects of International Trade between 94 (9)
Two-Factor Economies
Relative Prices and the Pattern of Trade 94 (2)
Trade and the Distribution of Income 96 (6)
Case Study: North-South Trade and 97 (2)
Income Inequality
Case Study: Skill-Biased Technological 99 (3)
Change and Income Inequality
Factor-Price Equalization 102 (1)
Empirical Evidence on the Heckscher-Ohlin 103 (7)
Model
Trade in Goods as a Substitute for Trade 104 (3)
in Factors: Factor Content of Trade
Patterns of Exports between Developed and 107 (2)
Developing Countries
Implications of the Tests 109 (1)
Summary 110 (4)
Appendix: Factor Prices, Goods Prices, and 114 (4)
Production Decisions
Choice of Technique 114 (1)
Goods Prices and Factor Prices 115 (2)
More on Resources and Output 117 (1)
6 The Standard Trade Model 118 (27)
A Standard Model of a Trading Economy 119 (13)
Production Possibilities and Relative 119 (1)
Supply
Relative Prices and Demand 120 (3)
The Welfare Effect of Changes in the 123 (1)
Terms of Trade
Determining Relative Prices 124 (1)
Economic Growth: A Shift of the RS curve 124 (2)
Growth and the Production Possibility 126 (1)
Frontier
World Relative Supply and the Terms of 126 (3)
Trade
International Effects of Growth 129 (3)
Case Study: Has the Growth of Newly 129 (3)
Industrializing Countries Hurt Advanced
Nations?
Tariffs and Export Subsidies: Simultaneous 132 (3)
Shifts in RS and RD
Relative Demand and Supply Effects of a 132 (1)
Tariff
Effects of an Export Subsidy 133 (1)
Implications of Terms of Trade Effects: 134 (1)
Who Gains and Who Loses?
International Borrowing and Lending 135 (3)
Intertemporal Production Possibilities 135 (1)
and Trade
The Real Interest Rate 136 (2)
Intertemporal Comparative Advantage 138 (1)
Summary 138 (4)
Appendix: More on Intertemporal Trade 142 (3)
7 External Economies Of Scale And The 145 (19)
International Location Of Production
Economies of Scale and International Trade: 146 (1)
An Overview
Economies of Scale and Market Structure 147 (1)
The Theory of External Economies 148 (1)
Specialized Suppliers 148 (1)
Labor Market Pooling 149 (1)
Knowledge Spillovers 150 (2)
External Economies and Market Equilibrium 151 (1)
External Economies and International Trade 152 (6)
External Economies, Output, and Prices 152 (1)
External Economies and the Pattern of 153 (3)
Trade
Box: Holding the World Together 155 (1)
Trade and Welfare with External Economies 156 (1)
Dynamic Increasing Returns 157 (1)
Interregional Trade and Economic Geography 158 (3)
Box: Tinseltown Economics 160 (1)
Summary 161 (3)
8 Firms In The Global Economy: Export 164 (42)
Decisions, Outsourcing, And Multinational
Enterprises
The Theory of Imperfect Competition 165 (8)
Monopoly: A Brief Review 166 (2)
Monopolistic Competition 168 (5)
Monopolistic Competition and Trade 173 (8)
The Effects of Increased Market Size 173 (1)
Gains from an Integrated Market: A 174 (4)
Numerical Example
The Significance of Intra-Industry Trade 178 (3)
Case Study: Infra-Industry Trade in 180 (1)
Action: The North American Auto Pact of
1964 and the North American Free Trade
Agreement (NAFTA)
Firm Responses to Trade: Winners, Losers, 181 (4)
and Industry Performance
Performance Differences across Producers 182 (2)
The Effects of Increased Market Size 184 (1)
Trade Costs and Export Decisions 185 (3)
Dumping 188 (2)
Case Study: Antidumping as Protectionism 189 (1)
Multinationals and Outsourcing 190 (4)
Case Study: Patterns of Foreign Direct 190 (4)
Investment Flows Around the World
The Firm's Decision Regarding Foreign 194 (6)
Direct Investment
Outsourcing 195 (4)
Case Study: Shipping Jobs Overseas? 197 (2)
Offshoring and Unemployment in the
United States
Consequences of Multinationals and 199 (1)
Foreign Outsourcing
Summary 200 (5)
Appendix: Determining Marginal Revenue 205 (1)
Part 2 International Trade Policy 206 (107)
9 The Instruments Of Trade Policy 206 (30)
Basic Tariff Analysis 206 (6)
Supply, Demand, and Trade in a Single 207 (2)
Industry
Effects of a Tariff 209 (1)
Measuring the Amount of Protection 210 (2)
Costs and Benefits of a Tariff 212 (5)
Consumer and Producer Surplus 212 (2)
Measuring the Costs and Benefits 214 (3)
Box: Tariffs for the Long Haul 216 (1)
Other Instruments of Trade Policy 217 (8)
Export Subsidies: Theory 217 (3)
Case Study: Europe's Common 218 (2)
Agricultural Policy
Import Quotas: Theory 220 (4)
Case Study: An Import Quota in 221 (3)
Practice: U.S. Sugar
Voluntary Export Restraints 224 (1)
Case Study: A Voluntary Export 224 (1)
Restraint in Practice
Local Content Requirements 225 (2)
Box: Bridging the Gap 226 (1)
Other Trade Policy Instruments 227 (1)
The Effects of Trade Policy: A Summary 227 (1)
Summary 228 (4)
Appendix: Tariffs and Import Quotas in the 232 (4)
Presence of Monopoly
The Model with Free Trade 232 (1)
The Model with a Tariff 233 (1)
The Model with an Import Quota 234 (1)
Comparing a Tariff and a Quota 234 (2)
10 The Political Economy Of Trade Policy 236 (39)
The Case for Free Trade 237 (5)
Free Trade and Efficiency 237 (1)
Additional Gains from Free Trade 238 (1)
Rent Seeking 239 (1)
Political Argument for Free Trade 239 (3)
Case Study: The Gains from 1992 240 (2)
National Welfare Arguments against Free 242 (4)
Trade
The Terms of Trade Argument for a Tariff 242 (1)
The Domestic Market Failure Argument 243 (2)
against Free Trade
How Convincing Is the Market Failure 245 (1)
Argument?
Income Distribution and Trade Policy 246 (6)
Electoral Competition 247 (1)
Collective Action 248 (2)
Box: Politicians for Sale: Evidence 249 (1)
from the 1990s
Modeling the Political Process 250 (1)
Who Gets Protected? 250 (2)
International Negotiations and Trade Policy 252 (9)
The Advantages of Negotiation 253 (1)
International Trade Agreements: A Brief 254 (2)
History
The Uruguay Round 256 (1)
Trade Liberalization 256 (1)
Administrative Reforms: From the GATT to 257 (1)
the WTO
Benefits and Costs 258 (3)
Box: Settling a Dispute-and Creating One 259 (1)
Case Study: Testing the WTO's Metal 260 (1)
The Doha Disappointment 261 (7)
Box: Do Agricultural Subsidies Hurt the 262 (1)
Third World?
Preferential Trading Agreements 263 (9)
Box: Free Trade Area versus Customs 265 (1)
Union
Box: Do Trade Preferences Have Appeal? 266 (1)
Case Study: Trade Diversion in South 267 (1)
America
Summary 268 (4)
Appendix: Proving that the Optimum Tariff 272 (3)
Is Positive
Demand and Supply 272 (1)
The Tariff and Prices 272 (1)
The Tariff and Domestic Welfare 273 (2)
11 Trade Policy In Developing Countries 275 (15)
Import-Substituting Industrialization 276 (5)
The Infant Industry Argument 277 (1)
Promoting Manufacturing Through Protection 278 (13)
Case Study: Mexico Abandons 280 (1)
Import-Substituting Industrialization
Results of Favoring Manufacturing: Problems 281 (1)
of Import-Substituting Industrialization
Trade Liberalization since 1985 282 (2)
Trade and Growth: Takeoff in Asia 284 (3)
Box: India's Boom 287 (1)
Summary 287 (3)
12 Controversies In Trade Policy 290 (23)
Sophisticated Arguments for Activist Trade 291 (8)
Policy
Technology and Externalities 291 (2)
Imperfect Competition and Strategic Trade 293 (6)
Policy
Box: A Warning from Intel's Founder 296 (1)
Case Study: When the Chips Were Up 297 (2)
Globalization and Low-Wage Labor 299 (6)
The Anti-Globalization Movement 299 (1)
Trade and Wages Revisited 300 (2)
Labor Standards and Trade Negotiations 302 (1)
Environmental and Cultural Issues 303 (1)
The WTO and National Independence 303 (2)
Case Study: A Tragedy in Bangladesh 304 (1)
Globalization and the Environment 305 (5)
Globalization, Growth, and Pollution 306 (1)
The Problem of "Pollution Havens" 307 (2)
The Carbon Tariff Dispute 309 (1)
Summary 310 (3)
Part 3 Exchange Rates and Open-Economy 313 (225)
Macroeconomics
13 National Income Accounting And The Balance 313 (29)
Of Payments
The National Income Accounts 315 (3)
National Product and National Income 316 (1)
Capital Depreciation and International 317 (1)
Transfers
Gross Domestic Product 317 (1)
National Income Accounting for an Open 318 (8)
Economy
Consumption 318 (1)
Investment 318 (1)
Government Purchases 319 (1)
The National Income Identity for an Open 319 (1)
Economy
An Imaginary Open Economy 320 (1)
The Current Account and Foreign 320 (3)
Indebtedness
Saving and the Current Account 323 (1)
Private and Government Saving 324 (2)
Box: The Mystery of the Missing Deficit 325 (1)
The Balance of Payments Accounts 326 (11)
Examples of Paired Transactions 327 (2)
The Fundamental Balance of Payments 329 (1)
Identity
The Current Account, Once Again 329 (1)
The Capital Account 330 (1)
The Financial Account 331 (1)
Net Errors and Omissions 332 (1)
Official Reserve Transactions 332 (11)
Case Study: The Assets and Liabilities 334 (3)
of the World's Biggest Debtor
Summary 337 (5)
14 Exchange Rates And The Foreign Exchange 342 (37)
Market: An Asset Approach
Exchange Rates and International 343 (3)
Transactions
Domestic and Foreign Prices 344 (1)
Exchange Rates and Relative Prices 345 (1)
The Foreign Exchange Market 346 (6)
The Actors 346 (2)
Box: Exchange Rates, Auto Prices, and 347 (1)
Currency Wars
Characteristics of the Market 348 (2)
Spot Rates and Forward Rates 350 (1)
Foreign Exchange Swaps 351 (1)
Futures and Options 351 (1)
The Demand for Foreign Currency Assets 352 (9)
Assets and Asset Returns 352 (3)
Box: Nondeliverable Forward Exchange 353 (2)
Trading in Asia
Risk and Liquidity 355 (1)
Interest Rates 356 (1)
Exchange Rates and Asset Returns 357 (1)
A Simple Rule 358 (2)
Return, Risk, and Liquidity in the 360 (1)
Foreign Exchange Market
Equilibrium in the Foreign Exchange Market 361 (5)
Interest Parity: The Basic Equilibrium 361 (1)
Condition
How Changes in the Current Exchange Rate 362 (1)
Affect Expected Returns
The Equilibrium Exchange Rate 363 (3)
Interest Rates, Expectations, and 366 (4)
Equilibrium
The Effect of Changing Interest Rates on 366 (1)
the Current Exchange Rate
The Effect of Changing Expectations on 367 (13)
the Current Exchange Rate
Case Study: What Explains the Carry 368 (2)
Trade?
Summary 370 (6)
Appendix: Forward Exchange Rates and 376 (3)
Covered Interest Parity
15 Money, Interest Rates, And Exchange Rates 379 (34)
Money Defined: A Brief Review 380 (2)
Money as a Medium of Exchange 380 (1)
Money as a Unit of Account 380 (1)
Money as a Store of Value 381 (1)
What Is Money? 381 (1)
How the Money Supply Is Determined 381 (1)
The Demand for Money by Individuals 382 (1)
Expected Return 382 (1)
Risk 383 (1)
Liquidity 383 (1)
Aggregate Money Demand 383 (2)
The Equilibrium Interest Rate: The 385 (4)
Interaction of Money Supply and Demand
Equilibrium in the Money Market 385 (2)
Interest Rates and the Money Supply 387 (1)
Output and the Interest Rate 388 (1)
The Money Supply and the Exchange Rate in 389 (5)
the Short Run
Linking Money, the Interest Rate, and the 389 (2)
Exchange Rate
U.S. Money Supply and the Dollar/Euro 391 (1)
Exchange Rate
Europe's Money Supply and the Dollar/Euro 392 (2)
Exchange Rate
Money, the Price Level, and the Exchange 394 (4)
Rate in the Long Run
Money and Money Prices 394 (1)
The Long-Run Effects of Money Supply 395 (1)
Changes
Empirical Evidence on Money Supplies and 396 (1)
Price Levels
Money and the Exchange Rate in the Long 397 (1)
Run
Inflation and Exchange Rate Dynamics 398 (10)
Short-Run Price Rigidity versus Long-Run 398 (3)
Price Flexibility
Box: Money Supply Growth and 400 (1)
Hyperinflation in Zimbabwe
Permanent Money Supply Changes and the 401 (2)
Exchange Rate
Exchange Rate Overshooting 403 (12)
Case Study: Can Higher Inflation Lead 405 (3)
to Currency Appreciation? The
Implications of Inflation Targeting
Summary 408 (5)
16 Price Levels And The Exchange Rate In The 413 (38)
Long Run
The Law of One Price 414 (1)
Purchasing Power Parity 415 (2)
The Relationship between PPP and the Law 415 (1)
of One Price
Absolute PPP and Relative PPP 416 (1)
A Long-Run Exchange Rate Model Based on PPP 417 (6)
The Fundamental Equation of the Monetary 417 (2)
Approach
Ongoing Inflation, Interest Parity, and 419 (1)
PPP
The Fisher Effect 420 (3)
Empirical Evidence on PPP and the Law of 423 (2)
One Price
Explaining the Problems with PPP 425 (7)
Trade Barriers and Nontradables 425 (1)
Departures from Free Competition 426 (1)
Differences in Consumption Patterns and 427 (3)
Price Level Measurement
Box: Some Meaty Evidence on the Law of 427 (3)
One Price
PPP in the Short Run and in the Long Run 430 (2)
Case Study: Why Price Levels Are Lower 431 (1)
in Poorer Countries
Beyond Purchasing Power Parity: A General 432 (8)
Model of Long-Run Exchange Rates
The Real Exchange Rate 433 (2)
Demand, Supply, and the Long-Run Real 435 (3)
Exchange Rate
Box: Sticky Prices and the Law of One 435 (3)
Price: Evidence from Scandinavian
Duty-Free Shops
Nominal and Real Exchange Rates in 438 (2)
Long-Run Equilibrium
International Interest Rate Differences and 440 (1)
the Real Exchange Rate
Real Interest Parity 441 (2)
Summary 443 (5)
Appendix: The Fisher Effect, the Interest 448 (3)
Rate, and the Exchange Rate under the
Flexible-Price Monetary Approach
17 Output And The Exchange Rate In The Short 451 (44)
Run
Determinants of Aggregate Demand in an Open 452 (3)
Economy
Determinants of Consumption Demand 452 (1)
Determinants of the Current Account 453 (1)
How Real Exchange Rate Changes Affect the 454 (1)
Current Account
How Disposable Income Changes Affect the 455 (1)
Current Account
The Equation of Aggregate Demand 455 (2)
The Real Exchange Rate and Aggregate 455 (1)
Demand
Real Income and Aggregate Demand 456 (1)
How Output Is Determined in the Short Run 457 (1)
Output Market Equilibrium in the Short Run: 458 (4)
The DD Schedule
Output, the Exchange Rate, and Output 458 (1)
Market Equilibrium
Deriving the DD Schedule 459 (1)
Factors that Shift the DD Schedule 459 (3)
Asset Market Equilibrium in the Short Run: 462 (4)
The AA Schedule
Output, the Exchange Rate, and Asset 463 (1)
Market Equilibrium
Deriving the AA Schedule 464 (1)
Factors that Shift the AA Schedule 465 (1)
Short-Run Equilibrium for an Open Economy: 466 (2)
Putting the DD and AA Schedules Together
Temporary Changes in Monetary and Fiscal 468 (3)
Policy
Monetary Policy 468 (1)
Fiscal Policy 469 (1)
Policies to Maintain Full Employment 470 (1)
Inflation Bias and Other Problems of Policy 471 (1)
Formulation
Permanent Shifts in Monetary and Fiscal 472 (5)
Policy
A Permanent Increase in the Money Supply 473 (1)
Adjustment to a Permanent Increase in the 474 (1)
Money Supply
A Permanent Fiscal Expansion 475 (2)
Macroeconomic Policies and the Current 477 (1)
Account
Gradual Trade Flow Adjustment and Current 478 (3)
Account Dynamics
The J-Curve 478 (2)
Exchange Rate Pass-Through and Inflation 480 (1)
The Current Account, Wealth, and Exchange 481 (1)
Rate Dynamics
The Liquidity Trap 481 (4)
Case Study: How Big Is the Government 484 (1)
Spending Multiplier?
Summary 485 (5)
Appendix 1: Intertemporal Trade and 490 (2)
Consumption Demand
Appendix 2: The Marshall-Lerner Condition 492 (3)
and Empirical Estimates of Trade
Elasticities
18 Fixed Exchange Rates And Foreign Exchange 495 (43)
Intervention
Why Study Fixed Exchange Rates? 496 (1)
Central Bank Intervention and the Money 497 (4)
Supply
The Central Bank Balance Sheet and the 497 (2)
Money Supply
Foreign Exchange Intervention and the 499 (1)
Money Supply
Sterilization 500 (1)
The Balance of Payments and the Money 500 (1)
Supply
How the Central Bank Fixes the Exchange Rate 501 (3)
Foreign Exchange Market Equilibrium under 502 (1)
a Fixed Exchange Rate
Money Market Equilibrium under a Fixed 502 (1)
Exchange Rate
A Diagrammatic Analysis 503 (1)
Stabilization Policies with a Fixed 504 (5)
Exchange Rate
Monetary Policy 505 (1)
Fiscal Policy 506 (1)
Changes in the Exchange Rate 507 (1)
Adjustment to Fiscal Policy and Exchange 508 (1)
Rate Changes
Balance of Payments Crises and Capital 509 (3)
Flight
Managed Floating and Sterilized Intervention 512 (6)
Perfect Asset Substitutability and the 512 (3)
Ineffectiveness of Sterilized Intervention
Case Study: Can Markets Attack a Strong 513 (2)
Currency? The Case of Switzerland
Foreign Exchange Market Equilibrium under 515 (1)
Imperfect Asset Substitutability
The Effects of Sterilized Intervention 515 (2)
with Imperfect Asset Substitutability
Evidence on the Effects of Sterilized 517 (1)
Intervention
Reserve Currencies in the World Monetary 518 (2)
System
The Mechanics of a Reserve Currency 518 (1)
Standard
The Asymmetric Position of the Reserve 519 (1)
Center
The Gold Standard 520 (7)
The Mechanics of a Gold Standard 520 (1)
Symmetric Monetary Adjustment under a 520 (1)
Gold Standard
Benefits and Drawbacks of the Gold 521 (1)
Standard
The Bimetallic Standard 522 (1)
The Gold Exchange Standard 522 (10)
Case Study: The Demand for 523 (4)
International Reserves
Summary 527 (5)
Appendix 1: Equilibrium in the Foreign 532 (3)
Exchange Market with Imperfect Asset
Substitutability
Demand 532 (1)
Supply 533 (1)
Equilibrium 533 (2)
Appendix 2: The Timing of Balance of 535 (3)
Payments Crises
Part 4 International Macroeconomic Policy 538 (175)
19 International Monetary Systems: An 538 (59)
Historical Overview
Macroeconomic Policy Goals in an Open 539 (8)
Economy
Internal Balance: Full Employment and 540 (1)
Price Level Stability
External Balance: The Optimal Level of 541 (7)
the Current Account
Box: Can a Country Borrow Forever? The 543 (4)
Case of New Zealand
Classifying Monetary Systems: The 547 (1)
Open-Economy Monetary Trilemma
International Macroeconomic Policy under 548 (5)
the Gold Standard, 1870-1914
Origins of the Gold Standard 548 (1)
External Balance under the Gold Standard 549 (1)
The Price-Specie-Flow Mechanism 549 (1)
The Gold Standard "Rules of the Game": 550 (1)
Myth and Reality
Internal Balance under the Gold Standard 551 (2)
Case Study: The Political Economy of 552 (1)
Exchange Rate Regimes: Conflict over
America's Monetary Standard during the
1890s
The Interwar Years, 1918-1939 553 (3)
The Fleeting Return to Gold 553 (1)
International Economic Disintegration 554 (2)
Case Study: The International Gold 555 (1)
Standard and the Great Depression
The Bretton Woods System and the 556 (4)
International Monetary Fund
Goals and Structure of the IMF 557 (1)
Convertibility and the Expansion of 558 (1)
Private Financial Flows
Speculative Capital Flows and Crises 559 (1)
Analyzing Policy Options for Reaching 560 (4)
Internal and External Balance
Maintaining Internal Balance 560 (2)
Maintaining External Balance 562 (1)
Expenditure-Changing and 562 (2)
Expenditure-Switching Policies
The External Balance Problem of the United 564 (4)
States under Bretton Woods
Case Study: The End of Bretton Woods, 565 (1)
Worldwide Inflation, and the Transition
to Floating Rates
The Mechanics of Imported Inflation 566 (1)
Assessment 567 (1)
The Case for Floating Exchange Rates 568 (8)
Monetary Policy Autonomy 568 (1)
Symmetry 569 (1)
Exchange Rates as Automatic Stabilizers 570 (2)
Exchange Rates and External Balance 572 (11)
Case Study: The First Years of Floating 572 (4)
Rates, 1973-1990
Macroeconomic Interdependence under a 576 (7)
Floating Rate
Case Study: Transformation and Crisis 577 (6)
in the World Economy
What Has Been Learned since 1973? 583 (3)
Monetary Policy Autonomy 583 (1)
Symmetry 584 (1)
The Exchange Rate as an Automatic 585 (1)
Stabilizer
External Balance 585 (1)
The Problem of Policy Coordination 586 (1)
Are Fixed Exchange Rates Even an Option for 586 (1)
Most Countries?
Summary 587 (7)
Appendix: International Policy Coordination 594 (3)
Failures
20 Financial Globalization: Opportunity And 597 (37)
Crisis
The International Capital Market and the 598 (4)
Gains from Trade
Three Types of Gain from Trade 598 (2)
Risk Aversion 600 (1)
Portfolio Diversification as a Motive for 600 (1)
International Asset Trade
The Menu of International Assets: Debt 601 (1)
versus Equity
International Banking and the International 602 (3)
Capital Market
The Structure of the International 602 (1)
Capital Market
Offshore Banking and Offshore Currency 603 (2)
Trading
The Shadow Banking System 605 (1)
Banking and Financial Fragility 605 (7)
The Problem of Bank Failure 605 (3)
Government Safeguards against Financial 608 (2)
Instability
Moral Hazard and the Problem of "Too Big 610 (2)
to Fail"
Box: The Simple Algebra of Moral Hazard 611 (1)
The Challenge of Regulating International 612 (10)
Banking
The Financial Trilemma 612 (2)
International Regulatory Cooperation 614 (6)
through 2007
Case Study: The Global Financial Crisis 615 (3)
of 2007-2009
Box: Foreign Exchange Instability and 618 (2)
Central Bank Swap Lines
International Regulatory Initiatives 620 (2)
after the Global Financial Crisis
How Well Have International Financial 622 (7)
Markets Allocated Capital and Risk?
The Extent of International Portfolio 622 (2)
Diversification
The Extent of Intertemporal Trade 624 (1)
Onshore-Offshore Interest Differentials 625 (1)
The Efficiency of the Foreign Exchange 625 (4)
Market
Summary 629 (5)
21 Optimum Currency Areas And The Euro 634 (36)
How the European Single Currency Evolved 636 (5)
What Has Driven European Monetary 636 (1)
Cooperation?
The European Monetary System, 1979-1998 637 (1)
German Monetary Dominance and the 638 (1)
Credibility Theory of the EMS
Market Integration Initiatives 639 (1)
European Economic and Monetary Union 640 (1)
The Euro and Economic Policy in the Euro 641 (2)
Zone
The Maastricht Convergence Criteria and 641 (1)
the Stability and Growth Pact
The European Central Bank and the 642 (1)
Eurosystem
The Revised Exchange Rate Mechanism 643 (1)
The Theory of Optimum Currency Areas 643 (12)
Economic Integration and the Benefits of 644 (2)
a Fixed Exchange Rate Area: The GG
Schedule
Economic Integration and the Costs of a 646 (2)
Fixed Exchange Rate Area: The LL Schedule
The Decision to Join a Currency Area: 648 (2)
Putting the GG and LL Schedules Together
What Is an Optimum Currency Area? 650 (1)
Other Important Considerations 650 (5)
Case Study: Is Europe an Optimum 651 (4)
Currency Area?
The Euro Crisis and the Future of EMU 655 (10)
Origins of the Crisis 655 (5)
Self-Fulfilling Government Default and 660 (2)
the "Doom Loop"
A Broader Crisis and Policy Responses 662 (1)
ECB Outright Monetary Transactions 663 (1)
The Future of EMU 664 (1)
Summary 665 (5)
22 Developing Countries: Growth, Crisis, And 670 (43)
Reform
Income, Wealth, and Growth in the World 671 (3)
Economy
The Gap between Rich and Poor 671 (1)
Has the World Income Gap Narrowed Over 672 (2)
Time?
Structural Features of Developing Countries 674 (3)
Developing-Country Borrowing and Debt 677 (11)
The Economics of Financial Inflows to 677 (2)
Developing Countries
The Problem of Default 679 (2)
Alternative Forms of Financial Inflow 681 (1)
The Problem of "Original Sin" 682 (2)
The Debt Crisis of the 1980s 684 (1)
Reforms, Capital Inflows, and the Return 685 (3)
of Crisis
East Asia: Success and Crisis 688 (6)
The East Asian Economic Miracle 688 (3)
Box: Why Have Developing Countries 689 (2)
Accumulated Such High Levels of
International Reserves?
Asian Weaknesses 691 (2)
Box: What Did East Asia Do Right? 692 (1)
The Asian Financial Crisis 693 (1)
Lessons of Developing-Country Crises 694 (2)
Reforming the World's Financial 696 (7)
"Architecture"
Capital Mobility and the Trilemma of the 697 (1)
Exchange Rate Regime
"Prophylactic" Measures 698 (1)
Coping with Crisis 699 (4)
Case Study: China's Pegged Currency 700 (3)
Understanding Global Capital Flows and the 703 (5)
Global Distribution of Income: Is Geography
Destiny?
Box: Capital Paradoxes 704 (4)
Summary 708 (5)
Mathematical Postscripts 713 (22)
Postscript to Chapter 5: The 713 (4)
Factor-Proportions Model
Factor Prices and Costs 713 (2)
Goods Prices and Factor Prices 715 (1)
Factor Supplies and Outputs 716 (1)
Postscript to Chapter 6: The Trading World 717 (8)
Economy
Supply, Demand, and Equilibrium 717 (2)
Supply, Demand, and the Stability of 719 (2)
Equilibrium
Effects of Changes in Supply and Demand 721 (1)
Economic Growth 721 (1)
A Transfer of Income 722 (1)
A Tariff 723 (2)
Postscript to Chapter 8: The Monopolistic 725 (2)
Competition Model
Postscript to Chapter 20: Risk Aversion and 727 (8)
International Portfolio Diversification
An Analytical Derivation of the Optimal 727 (1)
Portfolio
A Diagrammatic Derivation of the Optimal 728 (2)
Portfolio
The Effects of Changing Rates of Return 730 (5)
Index 735 (18)
Credits 753