This book compares and contrasts flexible versus fixed exchange rate regimes. Beginning with their theoretical justifications, it showcases their observed advantages and disadvantages as they played out in the currency crises of the 1990s and early 2000s across Asia, Europe and Latin America. An analysis of the drivers and implications of these crises singles out fast-paced liberalization and globalization as having played central roles. Moreover it sheds light on some of the factors contributing to the 2008 financial crisis and the key monetary events in its aftermath. An accessible, yet rigorous discussion, supported by extensive evidence, helps readers reach their own conclusions regarding the respective merits of alternative exchange rate systems.
Introduction
Chapter 1
The Exchange Rate and the Balance of Payments Theories after the WW II
1.1 Introduction
1.2 Currency Depreciation and the Balance of Trade: The Harbeger Model
1.3 Flexible Exchange rates as an alternative of Fixed Exchange Rates: The Laursen -Metzler Analysis
1.4 The Balance of Payments Difficulties
1.5 The Case for Flexible Exchange Rates in Friedman
1.6 Gold Standard and the International Monetary System: A historical view
1.7 National Currencies and Convertibility to Gold Standard
1.8 Flexible Exchange Rates and Demand Elasticities in Sohmen
1.9 Some Conclusions
Chapter 2
Capital Mobility, Fiscal Policy and Dynamic Adjustment under Alternative Exchange-Rate Systems
2.1 Introduction
2.2 Fiscal and Monetary Policies Under Different Exchange-Rate Systems
2.3 Capital Flows and Effects on Employment Under Fixed and Flexible Exchange Rates
2.4 Intermediate Imports Under Flexible Exchange Rates
2.5 Some Commercial and Trade Policies Under Fixed and Flexible Exchange Rates
2.6 Dynamic Adjustments of Exchange Rates
2.7 Credibility and Optimization in Monetary Policy
2.8 The Role of Central Banker and Optimal Contracts
2.9 Special Drawing Rights and the Global Reserve Currency
2.10 Some Conclusions
Chapter 3
The Determination of Fixed and Flexible Exchange Rates
3.1 Introduction
3.2 Monetary Policy Coordination and Exchange Rates
3.3 Political Choice and Exchange Rates Regimes
3.4 Some Notes on Exchange Rates and Currency Crises in Open Economies
3.5 Unending Debate on Fixed versus Flexible Exchange Rates
3.6 Exchange Rate Regime Classification
3.7 Exchange Rate Regimes and Shock absorbers
3.8 Conclusions
Chapter 4
Optimum Currency Areas and Monetary Unions: History and Perspective
4.1 Introduction
4.2 Currency Areas in the Past and Present
4.3 Some Criteria for the Optimality of a Currency Area
4.4 From the Case for Optimum Currency Areas to the Case for Monetary Unions
4.5 A General View of Monetary Unions
4.6 Formal Models of an Optimum Currency Area
4.7 Some Shocking Aspects of an OCA
4.8 Costs and Benefits of an OCA and a Common Currency
4.9 European Monetary Union and its Centralized Monetary Policy
4.10 Monetary Unions and the Debate over Fiscal Federalism
4.11 Eurozone during Financial Crisis
4.12 European Monetary Union and the Greek Debt Crisis
4.13 Global Monetary Influence Areas. Two or Three Monetary Blocks?
4.14 Some conclusions
Chapter 5
Financial Crisis and Unconventional Monetary Policies
5.1 Introduction
5.2 Monetary Unions, Debt Crisis and Growth
5.3 Quantitative Easing and the Financial Market Impact
5.4 The Effects of Quantitative Easing on Interest and Exchange Rates
5.5 Quantitative Easing and the Real Economy
5.6 Quantitative Easing and Fiscal Policy
5.7 Quantitative Easing and Transmitting Channels
5.8 The Concept of Balance Sheet Recession during Financial Crisis
5.9 Stimulus Programs and Failed Investments
5.10 Some Notes on Global Debt
5.11 Overall Conclusions
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