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International Economics by Dennis R. Appleyard and Alfred J. Field

Appleyard, Field, and Cobba¬”s International Economics 5e text is an International Economics textbook that offers a consistent level of analysis and treatment of the two main subdivisions of international economics⬔ international trade theory and policy and international monetary theory and policy. Comprehensive and clear, the text helps students move beyond recognition toward and understanding of current and future international events. A new co-author, Steven L. Cobb from the University of North Texas, joins the book this edition and brings expertise especially in the fields of economic education and transition economies, particularly those in Eastern Europe.

 

Table of Contents:

1.  The World of International Economics,

  • Introduction,
  • The Nature of Merchandise Trade,
  • The Geographical Composition of Trade,
  • The Commodity Composition of Trade,
  • U.S. International Trade,
  • World Trade in Services,
  • The Changing Degree of Economic Interdependence,
  • Summary,
  • Appendix: A General Reference List in International Economics,

Part 1 The Classical Theory of Trade

2.  Early Trade Theories: Mercantilism and The Transition to The Classical World of David Ricardo,

  • Introduction,
  • The Oracle in the 21st Century,
  • Mercantilism,
  • The Mercantilist Economic System,
  • The Role of Government,
  • Mercantilism and Domestic Economic Policy,
  • In the Real World: Mercantilism Is Still Alive
  • The Challenge to Mercantilism by Early Classical writers,
  • David Hume—The Price-Specie-Flow Mechanism,
  • Concept Box 1: Capsule Summary of The Price-Specie-Flow Mechanism,
  • Concept Box 2: Concept Review—Price Elasticity and Total Expenditures,
  • Adam Smith And the Invisible Hand,
  • Titans of International Economics: Adam Smith (1723–1790),
  • Summary,

3 The Classical World of David Ricardo And Comparative Advantage,

  • Introduction,
  • Some Common Myths,
  • Assumptions of The Basic Ricardian Model,
  • Titans of International Economics: David Ricardo (1772–1823),
  • Ricardian Comparative Advantage,
  • In the Real World: Export Concentration of Selected Countries,
  • Comparative Advantage and The Total Gains from Trade,
  • Resource Constraints,
  • Complete Specialization,
  • Representing the Ricardian Model with Production-Possibilities Frontiers,
  • Production Possibilities—An Example,
  • Maximum Gains from Trade,
  • Comparative Advantage—Some Concluding Observations,
  • Summary,

4 Extensions and Tests of The Classical Model of Trade,

  • Introduction,
  • Trade Complexities in The Real World,
  • The Classical Model in Money Terms,
  • Wage Rate Limits and Exchange Rate Limits,
  • Concept Box 1: Wage Rate Limits and Exchange Rate Limits in The Monetized Ricardian Framework,
  • Multiple Commodities,
  • The Effect of Wage Rate Changes,
  • The Effect of Exchange Rate Changes,
  • Transportation Costs,
  • In the Real World: The Size of Transportation Costs,
  • Multiple Countries,
  • Evaluating the Classical Model,
  • In the Real World: Labour Productivity and Import Penetration in The U.S. Steel Industry,
  • Summary,
  • Appendix: The Dornbusch, Fischer, And Samuelson Model,

Part 2 Neoclassical Trade Theory

5 Introduction to Neoclassical Trade Theory: Tools to Be Employed,

  • Introduction,
  • The Theory of Consumer Behaviour,
  • Consumer Indifference Curves,
  • Titans of International Economics: Francis Ysidro Edgeworth (1845–1926),
  • The Budget Constraint,
  • Consumer Equilibrium,
  • Production Theory,
  • Isoquants,
  • In the Real World: Consumer Expenditure Patterns in The United States,
  • Is cost Lines,
  • Producer Equilibrium,
  • The Edgeworth Box Diagram and The Production-Possibilities Frontier,
  • The Edgeworth Box Diagram,
  • The Production-Possibilities Frontier,
  • Summary,

6 Gains from Trade in Neoclassical Theory,

  • Introduction,
  • The Effects of Restrictions on U.S. Trade,
  • Autarky Equilibrium,
  • Introduction of International Trade,
  • The Consumption and Production Gains from Trade,
  • Trade in The Partner Country,
  • Minimum Conditions for Trade,
  • Trade Between Countries with Identical Puffs,
  • Trade Between Countries with Identical Demand Conditions,
  • Conclusions,
  • Some Important Assumptions in The Analysis,
  • Costless Factor Mobility,
  • Full Employment of Factors of Production,
  • The Indifference Curve Map Can Show Welfare Changes,
  • In the Real World: Changes in Income Distribution with Increased Trade,
  • Summary,
  • Appendix: “Actual” Versus “Potential” Gains from Trade,

7 Offer Curves and The Terms of Trade,

  • Introduction,
  • Terms-Of-Trade Shocks,
  • A country’s Offer Curve,
  • Concept Box 1: The Tabular Approach to Deriving an Offer Curve,
  • Trading Equilibrium,
  • Shifts of Offer Curves,
  • Concept Box 2: Measurement of The Terms of Trade,
  • Elasticity and The Offer Curve,
  • In the Real World: Terms of Trade for Major Groups of Countries, 1973–2007,
  • Other Concepts of The Terms of Trade,
  • Income Terms of Trade,
  • Single Factorial Terms of Trade,
  • In the Real World: Income Terms of Trade of Major Groups of Countries, 1973–2007,
  • Double Factorial Terms of Trade,
  • Summary,
  • Appendix A: Derivation of Import-Demand Elasticity on An Offer Curve,
  • Appendix B: Elasticity and Instability of Offer Curve Equilibria,

8 The Basis for Trade: Factor Endowments and The Heckscher-Ohlin Model,

  • Introduction,
  • Do Labour Standards Affect Comparative Advantage?
  • Supply, Demand, And Autarky Prices,
  • Factor Endowments and The Heckscher-Ohlin Theorem,
  • Factor Abundance and Heckscher-Ohlin,
  • Commodity Factor Intensity and Heckscher- Ohlin,
  • In the Real World: Relative Factor Endowments in Selected Countries,
  • In the Real World: Relative Factor Intensities in Selected Industries, 2006,
  • The Heckscher-Ohlin Theorem,
  • Titans of International Economics: Paul Anthony Samuelson (Born 1915),
  • The Factor Price Equalization Theorem,
  • The Stopper-Samuelson Theorem and Income Distribution Effects of Trade in The Heckscher-Ohlin Model,
  • Conclusions,
  • Theoretical Qualifications to Heckscher-Ohlin,
  • Demand Reversal,
  • Factor-Intensity Reversal,
  • Transportation Costs,
  • Imperfect Competition,
  • Immobile or Commodity-Specific Factors,
  • In the Real World: The Effects of International Cartels,
  • Other Considerations,
  • Concept Box 1: The Specific-Factors Model and The Real Wage of Workers,
  • Summary,

9 Empirical Tests of The Factor Endowments Approach,

  • Introduction,
  • Theories, Assumptions, And the Role of Empirical Work,
  • The Leontief Paradox,
  • Suggested Explanations Leontief For the Paradox,
  • Demand Reversal,
  • Factor-Intensity Reversal,
  • In the Real World: Capital/Labour Ratios in Leading Export and Import Industries—Leontief Test,
  • U.S. Tariff Structure,
  • Different Skill Levels of Labour,
  • The Role of Natural Resources,
  • Other Tests of The Heckscher-Ohlin Theorem,
  • Factor Content Approach with Many Factors,
  • Comparisons of Calculated and Actual Abundances,
  • Productivity Differences And “Home Bias,”
  • In the Real World: Case of The Missing Trade and Other Mysteries,
  • Heckscher-Ohlin And Income Inequality,
  • In the Real World: Trade and Income Inequality in A Less Developed Country: The Case of Mozambique,
  • In the Real World: Outsourcing and Wage Inequality in The United States,
  • Summary,

Part 3 Additional Theories and Extensions

10 Post–Heckscher-Ohlin Theories of Trade and Intra-Industry Trade,

  • Introduction,
  • A Trade Myth,
  • Post–Heckscher-Ohlin Theories of Trade,
  • The Imitation Lag Hypothesis,
  • The Product Cycle Theory,
  • Vertical Specialization-Based Trade,
  • Firm-Focused Theories,
  • The Linder theory,
  • In the Real World: New Venture Internationalization,
  • In the Real World: A Re-examination of The Linder Hypothesis,
  • Economies of Scale,
  • The Krugman Model,
  • Other Post–Heckscher-Ohlin Theories,
  • Concluding Comments on Post–Heckscher-Ohlin Trade Theories,
  • Intra-Industry Trade,
  • In the Real World: Geography and Trade,
  • Reasons for Intra-Industry Trade in A Product Category,
  • The Level of a Country’s Intra-Industry Trade,
  • Summary,
  • Appendix A: Economies of Scale,
  • Appendix B: Monopolistic Competition and Price Elasticity of Demand in The Krugman Model,
  • Appendix C: Differentiating Among Alternative Trade Theories Using the Gravity Equation,
  • Appendix D: Measurement of Intra-Industry Trade,

11 Economic Growth and International Trade,

  • Introduction,
  • China—A Regional Growth Pole,
  • Classifying the Trade Effects of Economic Growth,
  • Trade Effects of Production Growth,
  • Trade Effects of Consumption Growth,
  • Sources of Growth and The Production-Possibilities Frontier,
  • The Effects of Technological Change,
  • In the Real World: Labour and Capital Requirements Per Unit of Output,
  • In the Real World: “Spillovers” As A Contributor to Economic Growth,
  • The Effects of Factor Growth,
  • Factor Growth, Trade, And welfare In the Small-Country Case,
  • Growth, Trade, And welfare: The Large-Country Case,
  • Concept Box 1: Labour Force Growth And Per Capita Income,
  • Concept Box 2: Economic Growth and The Offer Curve,
  • Growth and The Terms of Trade: A Developing-Country Perspective,
  • In the Real World: Terms of Trade of Brazil, Jordan, Morocco, And Thailand, 1980–2007,
  • Summary,

12 International Factor Movements,

  • Introduction,
  • International Capital Movements Through Foreign Direct Investment and Multinational Corporations,
  • Foreign Investors in China: “Good” Or “Bad” From the Chinese Perspective?
  • Definitions,
  • Some Data on Foreign Direct Investment and Multinational Corporations,
  • Reasons for International Movement of Capital,
  • In the Real World: Determinants of Foreign Direct Investment,
  • Analytical Effects of International Capital Movements,
  • In the Real World: Host-Country Determinants of Foreign Direct Investment Inflows,
  • Potential Benefits and Costs of Foreign Direct Investment to A Host Country,
  • Labour Movements Between Countries,
  • Seasonal Workers in Germany,
  • Permanent Migration: A Greek In Germany,
  • In the Real World: Migration Flows into The United States, 1986 And 2006,
  • Economic Effects of Labour Movements,
  • Additional Considerations Pertaining to International Migration,
  • In the Real World: Immigrant Remittances,
  • Immigration and The United States—Recent Perspectives,
  • In the Real World: Is There A Licensing Bias Against Foreign Medical Graduates?
  • In the Real World: Immigration into The United States and The Brain Drain from Developing Countries,
  • Summary,

Part 4 Trade Policy

13 The Instruments of Trade Policy,

  • Introduction,
  • In What Ways Can I Interfere with Trade?
  • Import Tariffs,
  • Specific Tariffs,
  • Ad Valorem Tariffs,
  • Other Features of Tariff Schedules,
  • In the Real World: U.S. Tariff Rates,
  • In the Real World: The U.S. Generalized System of Preferences,
  • Measurement of Tariffs,
  • In the Real World: Nominal and Effective Tariffs in The United States and Japan,
  • In the Real World: Effective Tariff Rates in Bangladesh,
  • Export Taxes and Subsidies,
  • Nontariff Barriers to Free Trade,
  • Import Quotas,
  • “Voluntary” Export Restraints (Veers),
  • Government Procurement Provisions,
  • Domestic Content Provisions,
  • European Border Taxes,
  • Administrative Classification,
  • Restrictions on Services Trade,
  • Trade-Related Investment Measures,
  • Additional Restrictions,
  • In the Real World: Is It A Car? Is It A Truck?
  • Additional Domestic Policies That Affect Trade,
  • In the Real World: Examples of Control Over Trade,
  • In the Real World: The Effect of Protection Instruments on Domestic Prices,
  • Summary,

14 The Impact of Trade Policies,

  • Introduction,
  • Gainers and Losers from Steel Tariffs,
  • Trade Restrictions in A Partial Equilibrium Setting: The Small-Country Case,
  • The Impact of An Import Tariff,
  • The Impact of An Import Quota and A Subsidy to Import-Competing Production,
  • The Impact of Export Policies,
  • In the Real World: Real Income Gains from Trade Liberalization in Agriculture,
  • Trade Restrictions in A Partial Equilibrium Setting: The Large-Country Case,
  • Framework for Analysis,
  • The Impact of An Import Tariff,
  • The Impact of An Import Quota,
  • The Impact of An Export Tax,
  • In the Real World: Welfare Costs of U.S. Import Quotas and Veers,
  • The Impact of An Export Subsidy,
  • Trade Restrictions in A General Equilibrium Setting,
  • Protection in The Small-Country Case,
  • In the Real World: The U.S. Export Enhancement Program for Wheat,
  • Protection in The Large-Country Case,
  • Other Effects of Protection,
  • In the Real World: Domestic Effects of The Sugar Quota System,
  • Summary,
  • Appendix A: The Impact of Protection in A Market with Nonhomogeneous Goods,
  • Appendix B: The Impact of Trade Policy in The Large-Country Setting Using Export Supply and Import Demand Curves,

15 Arguments for Interventionist Trade Policies,

  • Introduction,
  • Trade Policy as A Part of Broader Social Policy Objectives for A Nation,
  • Trade Taxes as A Source of Government Revenue,
  • National Défense Argument for A Tariff,
  • In the Real World: The Relative Importance of Trade Taxes as A Source of Government Revenue,
  • Tariff to Improve the Balance of Trade,
  • The Terms-Of-Trade Argument for Protection,
  • Tariff to Reduce Aggregate Unemployment,
  • Tariff to Increase Employment in A Particular Industry,
  • In the Real World: Industry Employment Effects of Trade Liberalization,
  • In the Real World: Costs of Protecting Industry Employment,
  • Tariff to Benefit A Scarce Factor of Production,
  • Fostering “National Pride” In Key Industries,
  • Differential Protection as A Component of a Foreign Policy/Aid Package,
  • Protection to Offset Market Imperfections,
  • The Presence of Externalities as An Argument for Protection,
  • Tariff to Extract Foreign Monopoly Profit,
  • The Use of An Export Tax to Redistribute Profit from A Domestic Monopolist,
  • Protection as A Response to International Policy Distortions,
  • Tariff to Offset Foreign Dumping,
  • Tariff to Offset A Foreign Subsidy,
  • In the Real World: Antidumping Actions in The United States,
  • In the Real World: Countervailing Duties in The United States,
  • Miscellaneous, Invalid Arguments,
  • Strategic Trade Policy: Fostering Comparative Advantage,
  • The Infant Industry Argument for Protection,
  • In the Real World: U.S. Motorcycles—A Successful Infant Industry?
  • Economies of Scale in A Duopoly Framework,
  • Research and Development and Sales of a Home Firm,
  • Export Subsidy in Duopoly,
  • Strategic Government Interaction and World Welfare,
  • In the Real World: Airbus Industry,
  • Concluding Observations on Strategic Trade Policy,
  • Summary,

16 Political Economy and U.S. Trade Policy,

  • Introduction,
  • Contrasting Vignettes on Trade Policy,
  • The Political Economy of Trade Policy,
  • The Self-Interest Approach to Trade Policy,
  • In the Real World: World Attitudes Toward Foreign Trade,
  • In the Real World: Changing U.S. Attitudes Toward International Trade, 1992–2009,
  • In the Real World: Politics Puts the Squeeze Tomato Imports,
  • On the Social Objectives Approach,
  • An Overview of The Political Science Take on Trade Policy,
  • Baldwin’s Integrative Framework for Analysing Trade Policy,
  • Are view Of U.S. Trade Policy,
  • Reciprocal Trade Agreements and Early Glatt Rounds,
  • The Kennedy Round of Trade Negotiations,
  • The Tokyo Round of Trade Negotiations,
  • In the Real World: The Determinants of Trade Adjustment Assistance,
  • The Uruguay Round of Trade Negotiations,
  • Trade Policy Issues After the Uruguay Round,
  • In the Real World: Tariff Reductions Resulting from The Uruguay Round,
  • In the Real World: National Sovereignty and The World Trade Organization,
  • The Doha Development Agenda,
  • Recent U.S. Actions,
  • In the Real World: Health, Safety, Or Protectionism?
  • Concluding Observations on Trade Policy,
  • The Conduct of Trade Policy,
  • Empirical Work on Political Economy,
  • Summary,
  • Appendix: A Two Statement on Its Aims and Functions,

17 Economic Integration,

  • Introduction,
  • An Expanded European Union,
  • Types of Economic Integration,
  • Free-Trade Area,
  • Customs Union,
  • Common Market,
  • Economic Union,
  • The Static and Dynamic Effects of Economic Integration,
  • Static Effects of Economic Integration,
  • In the Real World: Economic Integration Units,
  • In the Real World: Trade Creation and Trade Diversion in The Early Stages of European Economic Integration,
  • General Conclusions on Trade Creation/Trade Diversion,
  • Concept Box 1: Trade Diversion in General Equilibrium,
  • Dynamic Effects of Economic Integration,
  • Summary of Economic Integration,
  • The European Union,
  • History and Structure,
  • In the Real World: The East African Community,
  • Growth and Disappointments,
  • Completing the Internal Market,
  • Prospects,
  • In the Real World: Canadian Regional Trade Agreements—Is the Eu Next?
  • North American Economic Integration,
  • Greater Integration,
  • Worries Over Naveta,
  • Naveta And Recent U.S. Free-Trade Agreements,
  • In the Real World: Naveta—Myths Versus Facts,
  • Other Major Economic Integration Efforts,
  • Mercosur,
  • Caftan–Dr,
  • Fatal,
  • Chilean Trade Agreements,
  • In the Real World: Asian Economic Interdependence Leads to Greater Integration,
  • Ape,
  • Summary,

18 International Trade and The Developing Countries,

  • Introduction,
  • Strong Recovery in East Asia,
  • An Overview of The Developing Countries,
  • A Closer Look at The Least Developed Countries,
  • The Role of Trade in Fostering Economic Development,
  • The Static Effects of Trade on Economic Development,
  • The Dynamic Effects of Trade on Economic Development,
  • Export Instability,
  • Potential Causes of Export Instability,
  • Long-Run Terms-Of-Trade Deterioration,
  • Titans of International Economics: Raul Prebatch (1901–1986) And Hans Wolfgang Singer (1910–2006),
  • Trade, Economic Growth, And Development: The Empirical Evidence,
  • Trade Policy and The Developing Countries,
  • Policies to Stabilize Export Prices or Earnings,
  • Problems with International Commodity Agreements,
  • In the Real World: Managing Price Instability,
  • Suggested Policies to Combat A Long-Run Deterioration in The Terms of Trade,
  • In the Real World: The Length of Commodity Price Shocks,
  • In the Real World: Comecon Foreign Trade Pricing Strategies,
  • Inward-Looking Versus Outward-Looking Trade Strategies,
  • In the Real World: Terrorism and Its Effect on Developing Countries,
  • In the Real World: Emerging Connections Between Asia And Africa,
  • The External Debt Problem of The Developing Countries,
  • Causes of The Developing Countries’ Debt Problem,
  • Possible Solutions to The Debt Problem,
  • In the Real World: The Multilateral Debt Relief Initiative,
  • Summary,

Part 5 Fundamentals of International Monetary Economics

19 The Balance-Of-Payments Accounts,

  • Introduction,
  • China’s Trade Surpluses and Deficits,
  • Recent Growth of Trade and Capital Movements,
  • Credits and Debits in Balance-Of-Payments Accounting,
  • Sample Entries in The Balance-Of-Payments Accounts,
  • Assembling A Balance-Of-Payments Summary Statement,
  • In the Real World: Current Account Deficits,
  • Balance-Of-Payments Summary Statement for The United States,
  • In the Real World: U.S. Trade Deficits with Japan, China, Optec, And Canada,
  • International Investment Position of The United States,
  • In the Real World: Trends in The U.S. International Investment Position,
  • Summary,

20 The Foreign Exchange Market,

  • Introduction,
  • The Case of The Wayward U.S. Dollar,
  • The Foreign Exchange Rate and The Market for Foreign Exchange,
  • Demand Side,
  • Supply Side,
  • The Market,
  • The Spot Market,
  • Principal Actors,
  • The Role of Arbitrage,
  • Different Measures of The Spot Rate,
  • In the Real World: Nominal and Real Exchange Rates of The U.S. Dollar,
  • The Forward Market,
  • In the Real World: Spot and Papp Exchange Rates,
  • Concept Box 1: Currency Futures Quotations,
  • Concept Box 2: Currency Futures Option Quotations,
  • The Link Between the Foreign Exchange Markets and The Financial Markets,
  • The Basis for International Financial Flows,
  • Covered Interest Parity and Financial Market Equilibrium,
  • Simultaneous Adjustment of The Foreign Exchange Markets and The Financial Markets,
  • Summary,

21 International Financial Markets and Instruments: An Introduction,

  • Introduction,
  • Financial Globalization: A Recent Phenomenon?
  • International Bank Lending,
  • The International Bond Market (Debt Securities),
  • In the Real World: Interest Rates Across Countries,
  • International Stock Markets,
  • Financial Linkages and Eurocurrency Derivatives,
  • Basic International Financial Linkages: A Review,
  • International Financial Linkages and The Eurodollar Market,
  • In the Real World: U.S. Domestic and Eurodollar Deposit and Lending Rates, 1989–2008,
  • Hedging Eurodollar Interest Rate Risk,
  • Concept Box 1: Eurodollar Interest Rate Futures Market Quotations,
  • Concept Box 2: Eurodollar Interest Option Quotations,
  • The Current Global Derivatives Market,
  • Summary,

22 The Monetary and Portfolio Balance Approaches to External Balance,

  • Introduction,
  • The New Globalized Capital,
  • The Monetary Approach to The Balance of Payments,
  • The Supply of Money,
  • The Demand for Money,
  • In the Real World: Relationships Between Monetary Concepts in The United States,
  • Monetary Equilibrium and The Balance of Payments,
  • The Monetary Approach to The Exchange Rate,
  • In the Real World: Money Growth and Exchange Rates in The Russian Transition,
  • A Two-Country Framework,
  • The Portfolio Balance Approach to The Balance of Payments and The Exchange Rate,
  • Asset Demands,
  • Portfolio Balance,
  • Portfolio Adjustments,
  • Exchange Rate Overshooting,
  • Titans of International Economics: Ruediger Dornbusch (1942–2002),
  • Summary,
  • Appendix: A Brief Look at Empirical Work on The Monetary and Portfolio Balance Approaches,

23 Price Adjustments and Balance-Of-Payments Disequilibrium,

  • Introduction,
  • Price Adjustment: The Exchange Rate Question,
  • The Price Adjustment Process and The Current Account Under A Flexible-Rate System,
  • The Demand for Foreign Goods and Services and The Foreign Exchange Market,
  • Market Stability and The Price Adjustment Mechanism,
  • Concept Box 1: Elasticity of Import Demand and The Supply Curve of Foreign Exchange When Demand Is Linear,
  • The Price Adjustment Process: Short Run Versus Long Run,
  • In the Real World: Estimates of Import and Export Demand Elasticities,
  • In the Real World: Exchange Rate Pass-Through of Foreign Exports to The United States,
  • In the Real World: Japanese Export Pricing and Pass-Through in the 1990s,
  • In the Real World: U.S. Agricultural Exports and Exchange Rate Changes,
  • The Price Adjustment Mechanism in A Fixed Exchange Rate System,
  • Gold Standard,
  • The Price Adjustment Mechanism and The Pegged Rate System,
  • In the Real World: Exchange Rate Regimes in Transition Economies,
  • Summary,
  • Appendix: Derivation of The Marshall-Lerner Condition,
  • 24 National Income and The Current Account,
  • Introduction,
  • Does GDP Growth Cause Trade Deficits?
  • The Current Account and National Income,
  • The Keynesian Income Model,
  • Titans of International Economics: John Maynard Keynes (1883–1946),
  • Determining the Equilibrium Level of National Income,
  • In the Real World: Average Propensities to Import, Selected Countries,
  • The Autonomous Spending Multiplier,
  • In the Real World: Multiplier Estimates for India,
  • The Current Account and The Multiplier,
  • Foreign Repercussions and The Multiplier Process,
  • In the Real World: Correlations of Macroeconomic Variables Across Countries,
  • In the Real World: Synchronization of GDP Movements Across Countries,
  • An Overview of Price and Income Adjustments and Simultaneous External and Internal Balance,
  • Summary,
  • Appendix A: The Multiplier When Taxes Depend on Income,
  • Appendix B: Derivation of The Multiplier with Foreign Repercussions,

Part 6 Macroeconomic Policy in The Open Economy

25 Economic Policy in The Open Economy Under Fixed Exchange Rates,

  • Introduction,
  • The Case of The Chinese Renminbi Yuan,
  • Targets, Instruments, And Economic Policy in A Two-Instrument, Two-Target model,
  • In the Real World: Exchange Rate Arrangements,
  • Titans of International Economics: Robert A. Mundell (Born 1932),
  • General Equilibrium in The Open Economy Model: The Is/Elm/Bp Model,
  • General Equilibrium in The Money Market: The Elm Curve,
  • General Equilibrium in The Real Sector: The Is Curve,
  • Simultaneous Equilibrium in The Monetary and Real Sectors,
  • Equilibrium in The Balance of Payments: The Bp Curve,
  • In the Real World: The Presence of Exchange Controls in The Current Financial System,
  • Equilibrium in The Open Economy: The Simultaneous Use of The Elm, Is, And Bp Curves,
  • The Effects of Fiscal Policy Under Fixed Exchange Rates,
  • The Effects of Monetary Policy Under Fixed Exchange Rates,
  • The Effects of Official Changes in The Exchange Rate,
  • In the Real World: The Rise and Fall of a Currency Board—The Case of Argentina,
  • Summary,
  • Appendix: The Relationship Between the Exchange Rate and Income in Equilibrium,

26 Economic Policy in The Open Economy Under Flexible Exchange Rates,

  • Introduction,
  • Is There A Case for Flexible Rates?
  • The Effects of Fiscal and Monetary Policy Under Flexible Exchange Rates with Different Capital Mobility Assumptions,
  • Concept Box 1: Real and Financial Factors That Influence the Bp Curve,
  • The Effects of Fiscal Policy Under Different Capital Mobility Assumptions,
  • The Effects of Monetary Policy Under Different Capital Mobility Assumptions,
  • Policy Coordination Under Flexible Exchange Rates,
  • The Effects of Exogenous Shocks in The Is/Elm/Bp Model with Imperfect Mobility of Capital,
  • In the Real World: Commodity Prices and U.S. Real GDP, 1972–2008,
  • In the Real World: Policy Frictions in An Interdependent World,
  • In the Real World: Macroeconomic Policy Coordination, The If, And The G-7,
  • Summary,
  • Appendix: Policy Effects, Open-Economy Equilibrium, And the Exchange Rate Under Flexible Rates,

27 Prices and Output in The Open Economy: Aggregate Supply and Demand,

  • Introduction,
  • Crisis in Argentina,
  • Aggregate Demand and Supply in The Closed Economy,
  • Aggregate Demand in The Closed Economy,
  • Aggregate Supply in The Closed Economy,
  • Equilibrium in The Closed Economy,
  • In the Real World: U.S. Actual and Natural Income and Unemployment,
  • Aggregate Demand and Supply in The Open Economy,
  • Aggregate Demand in The Open Economy Under Fixed Rates,
  • Aggregate Demand in The Open Economy Under Flexible Rates,
  • The Nature of Economic Adjustment and Macroeconomic Policy in The Open-Economy Aggregate Supply and Demand Framework,
  • The Effect of Exogenous Shocks on The Aggregate Demand Curve Under Fixed and Flexible Rates,
  • The Effect of Monetary and Fiscal Policy on The Aggregate Demand Curve Under Fixed and Flexible Rates,
  • Summary,
  • Monetary and Fiscal Policy in The Open Economy with Flexible Prices,
  • Monetary Policy,
  • Currency Adjustments Under Fixed Rates,
  • Fiscal Policy,
  • Economic Policy and Supply Considerations,
  • In the Real World: Economic Progress in Sub-Saharan Africa,
  • External Shocks and The Open Economy,
  • In the Real World: Inflation and Unemployment in The United States, 1970–2007,
  • Summary,

Part 7 Issues in World Monetary Arrangements

28 Fixed or Flexible Exchange Rates?

  • Introduction,
  • Slovenia’s Changeover to The Euro—A Clear Success,
  • Central Issues in The Fixed–Flexible Exchange Rate Debate,
  • Do Fixed or Flexible Exchange Rates Provide for Greater “Discipline” On the Part of Policymakers?
  • Would Fixed or Flexible Exchange Rates Provide for Greater Growth in International Trade and Investment?
  • In the Real World: Exchange Risk and International Trade,
  • Would Fixed or Flexible Exchange Rates Provide for Greater Efficiency in Resource Allocation?
  • Is Macroeconomic Policy More Effective in Influencing National Income Under Fixed or Flexible Exchange Rates?
  • Will Destabilizing Speculation in Exchange Markets Be Greater Under Fixed or Flexible Exchange Rates?
  • In the Real World: Reserve Holdings Under Fixed and Flexible Exchange Rates,
  • Titans of International Economics: Milton Friedman (1912–2006),
  • Will Countries Be Better Protected from External Shocks Under A Fixed or A Flexible Exchange Rate System?
  • In the Real World: “Insulation” With Flexible Rates—The Case of Japan,
  • Currency Boards,
  • Advantages of A Currency Board,
  • In the Real World: Currency Boards in Estonia And Lithuania,
  • Disadvantages of A Currency Board,
  • Optimum Currency Areas,
  • Hybrid Systems Combining Fixed and Flexible Exchange Rates,
  • Wider Bands,
  • Crawling Pegs,
  • Managed Floating,
  • In the Real World: A Crawling Peg in Colombia,
  • Summary,

29 The International Monetary System: Past, Present, And Future,

  • Introduction,
  • Global Crisis Requires A Global Solution,
  • In the Real World: Flexible Exchange Rates in Post–World War I Europe: The United Kingdom, France, And Norway,
  • The Bretton woods System,
  • The Goals of The If,
  • The Bretton Woods System in Retrospect,
  • Gradual Evolution of a New International Monetary System,
  • Early Disruptions,
  • Special Drawing Rights,
  • The Breaking of The Gold–Dollar Link and The Smithsonian Agreement,
  • The Jamaica Accords,
  • The European Monetary System,
  • Exchange Rate Variations,
  • Short-Run Fluctuations in the 1990s and 2000s,
  • In the Real World: Adopting the Euro in The New Member States,
  • Current Exchange Rate Arrangements,
  • Experience Under the Current International Monetary System,
  • The Global Financial Crisis and Recession Of 2007–,
  • Suggestions for Reform of The International Monetary System,
  • A Return to The Gold Standard,
  • A World Central Bank,
  • Concept Box 1: A World Central Bank Within A Three-Currency Monetary Union,
  • The Target Zone Proposal,
  • Controls on Capital Flows,
  • Greater Stability and Coordination of Macroeconomic Policies Across Countries,
  • In the Real World: Policy Coordination and the G-20,
  • The International Monetary System and The Developing Countries,
  • Summary,

References for Further Reading,

Photo Credits,

Index,

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