Beruflich Dokumente
Kultur Dokumente
10-2
Introduction
10-3
Classroom Performance System
a) Fixed
b) Floating
c) Pegged
d) Market
10-4
The Gold Standard
10-5
Mechanics Of The Gold Standard
10-6
Strength Of The Gold Standard
10-7
Classroom Performance System
a) Fixed
b) Floating
c) Pegged
d) Market
10-8
The Period Between The Wars: 1918-1939
The gold standard worked fairly well from the 1870s until
the start of World War I in 1914
During the war, many governments financed their war
expenditures by printing money, and in doing so, created
inflation
People lost confidence in the system and started to
demand gold for their currency putting pressure on
countries' gold reserves, and forcing them to suspend gold
convertibility
By 1939, the gold standard was dead
10-9
The Bretton Woods System
10-10
The Bretton Woods System
10-11
The Role Of The IMF
The IMF was charged with executing the main goal of the
Bretton Woods agreement - avoiding a repetition of the
chaos that occurred between the wars through a
combination of discipline and flexibility
10-12
The Role Of The IMF
10-13
The Role Of The World Bank
10-14
The Collapse Of The Fixed
Exchange Rate System
10-15
The Floating Exchange Rate Regime
10-16
The Jamaica Agreement
10-17
Exchange Rates Since 1973
Since 1973, exchange rates have become more volatile and less
predictable than they were between 1945 and 1973
10-18
Exchange Rates Since 1973
Figure 10.1: Major Currencies Dollar Index, 1973-2006
10-19
Classroom Performance System
10-20
Fixed Versus Floating Exchange Rates
10-21
The Case For Floating Exchange Rates
10-22
The Case For Floating Exchange Rates
10-23
The Case For Fixed Exchange Rates
10-24
Who Is Right?
10-25
Exchange Rate Regimes In Practice
Currently:
14% of IMF members follow a free float policy
26% of IMF members follow a managed float system
28% of IMF members have no legal tender of their own
the remaining countries use less flexible systems such as
pegged arrangements, or adjustable pegs
10-26
Exchange Rate Regimes In Practice
Figure 10.2: Exchange Rate Policies, IMF Members, 2006
10-27
Classroom Performance System
a) Free float
b) Managed float
c) Fixed peg
d) Adjustable peg
10-28
Pegged Exchange Rates
10-29
Currency Boards
10-30
Crisis Management By The IMF
10-31
Financial Crises In The
Post-Bretton Woods Era
10-32
Classroom Performance System
a) currency crisis
b) banking crisis
c) foreign debt crisis
d) foreign exchange crisis
10-33
Mexican Currency Crisis Of 1995
10-34
The Asian Crisis
10-35
The Asian Crisis
10-36
The Asian Crisis
10-37
Evaluating The IMFs Policy Prescriptions
10-38
Implications For Managers
10-39
Currency Management
10-40
Business Strategy
10-41
Corporate-Government Relations
10-42
Classroom Performance System
A) corporate-governance relations
B) business strategy
C) foreign relations
D) currency management
10-43
Topic 7: International monetary system