Beruflich Dokumente
Kultur Dokumente
The International
Monetary
System,
1870–1973
Slides prepared by Thomas Bishop Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
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Macroeconomic Goals
1
Macroeconomic Goals (cont.)
2
Gold Standard, Revisited (cont.)
3
Gold Standard, Revisited (cont.)
4
Bretton Woods System: 1944–1973
5
Bretton Woods System: 1944–1973
Macroeconomic Goals
6
Macroeconomic Goals (cont.)
Internal balance
1
achieved: output
is at its full
employment level
II
Fiscal expansion
(G↑ or T↓)
Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 18-20
7
Macroeconomic Goals (cont.)
Exchange
rate, E
XX
Devaluation that
results in internal
and external
At point 2, the economy
balance: by 1 is below II and XX: it
making domestic
experiences low output
goods cheaper, 4 3 and a low current account
aggregate
demand, output 2
and the current
account increase. II
Fiscal expansion
Fiscal policy that results in internal or external (G↑ or T↓)
balance: by reducing demand for imports and
output or increasing demand for imports and output.
Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 18-22
8
Fig. 18-3: U.S. Macroeconomic Data,
1964–1972
Source: Economic Report of the President, 1985. Money supply growth rate is the December to December percentage
increase in M1. Inflation rate is the percentage increase in each year’s average consumer price index over the average
consumer price index for the previous year.
Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 18-25
Source: Economic Report of the President, 1985. Money supply growth rate is the December to December percentage
increase in M1. Inflation rate is the percentage increase in each year’s average consumer price index over the average
consumer price index for the previous year.
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Problems of a Fixed
Exchange Rate, Revisited
9
Problems of a Fixed
Exchange Rate, Revisited (cont.)
10
Collapse of the Bretton Woods
System (cont.)
11
International Effects of U.S.
Macroeconomic Policies (cont.)
Inflation rates in European economies relative to that in the US
10
9
8
7 US
6 France
p ercen t
5 Germany
4 Italy
3 Britain
2
1
0
1966 1967 1968 1969 1970 1971 1972
year
Source: Organization for Economic Cooperation and Development.
Figures are annual percentage increases in consumer price indexes.
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12
Summary
Summary (cont.)
Summary (cont.)
13
Additional Chapter Art
14
Table 18-1: Inflation Rates in European
Countries, 1966–1972 (percent per year)
15