Catherine Schenk
- Published in print:
- 2005
- Published Online:
- September 2007
- ISBN:
- 9780199269495
- eISBN:
- 9780191710162
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199269495.003.0010
- Subject:
- Business and Management, Finance, Accounting, and Banking
This chapter analyses policy responses to the instability of the international monetary system during the 1970s and how these policies affected the City of London. First, the collapse of the ...
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This chapter analyses policy responses to the instability of the international monetary system during the 1970s and how these policies affected the City of London. First, the collapse of the international monetary system through the 1960s and then the increased risk to the financial market in the 1970s accelerated the pace of financial innovation. Second, as currency speculation grew, policymakers were reluctant to relax controls on the flow of capital, and this had important implications for London's competitiveness. The debate between the state, academics, and bankers over the desirability of floating exchange rates is surveyed in this chapter. The era of floating exchange rates and inflation prompted an international and domestic banking crisis in 1974 that drew the Bank of England into more active attempts at prudential supervision.Less
This chapter analyses policy responses to the instability of the international monetary system during the 1970s and how these policies affected the City of London. First, the collapse of the international monetary system through the 1960s and then the increased risk to the financial market in the 1970s accelerated the pace of financial innovation. Second, as currency speculation grew, policymakers were reluctant to relax controls on the flow of capital, and this had important implications for London's competitiveness. The debate between the state, academics, and bankers over the desirability of floating exchange rates is surveyed in this chapter. The era of floating exchange rates and inflation prompted an international and domestic banking crisis in 1974 that drew the Bank of England into more active attempts at prudential supervision.
Tommaso Padoa‐Schioppa
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780199241767
- eISBN:
- 9780191596742
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199241767.003.0007
- Subject:
- Economics and Finance, Macro- and Monetary Economics
The long‐term prospects of the European Monetary System (EMS) are examined from a non‐technical viewpoint, considering the system as a variable rather than a given. The prospects are seen as ...
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The long‐term prospects of the European Monetary System (EMS) are examined from a non‐technical viewpoint, considering the system as a variable rather than a given. The prospects are seen as comprising three phases. The first phase, which has now concluded, is consolidation. The second phase is the current phase, and is the period in which the ‘inconsistent quartet’ emerges. This involves seeking to achieve the impossible task of reconciling free trade, full capital mobility, fixed (or managed) exchange rates, and national autonomy in the conduct of monetary policy. The third phase is starting to foresee European Monetary Union (EMU); in this phase full implementation of free trade and capital mobility will occur.Less
The long‐term prospects of the European Monetary System (EMS) are examined from a non‐technical viewpoint, considering the system as a variable rather than a given. The prospects are seen as comprising three phases. The first phase, which has now concluded, is consolidation. The second phase is the current phase, and is the period in which the ‘inconsistent quartet’ emerges. This involves seeking to achieve the impossible task of reconciling free trade, full capital mobility, fixed (or managed) exchange rates, and national autonomy in the conduct of monetary policy. The third phase is starting to foresee European Monetary Union (EMU); in this phase full implementation of free trade and capital mobility will occur.
Volbert Alexander, George M. von Furstenberg, and Jacques Mélitz (eds)
- Published in print:
- 2004
- Published Online:
- August 2004
- ISBN:
- 9780199271405
- eISBN:
- 9780191601200
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199271402.001.0001
- Subject:
- Economics and Finance, Economic Systems
Financial services with global reach are a highly information-intensive business. In it, the ability to deliver reliable price formation, global liquidity, and network benefits is increasingly ...
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Financial services with global reach are a highly information-intensive business. In it, the ability to deliver reliable price formation, global liquidity, and network benefits is increasingly critical for the choice of currency denomination. Conversely, the exchange value and prospective usefulness of small currencies becomes less certain, and transaction costs for them may rise. Economic instability is invited as currency and portfolio substitution with the dominant international currency denomination increase the likelihood of currency mismatches and financial crises. In view of these failings of many of the financially small currencies, the number of currencies worldwide well may shrink greatly in the decades ahead.Drawing lessons mostly from contemporary developments, this book analyzes current approaches to overcoming excessive monetary division within integrating regions. It focuses on the effects of monetary or currency unions on trade among members and on their financial development and stability. In the process, contributors analyze the promise and subversion of hard pegs such as that attempted by the currency board of Argentina. They also examine unilateral dollarization -- adopted in a few countries formally, and in many more informally without giving up the local currency -- and multilateral monetary union in Europe. There the euro functions as an innovative, non-hegemonic form of internationally shared and co-managed fiat money that will also be adopted by the 2004 class of European-Union accession countries in coming years.Less
Financial services with global reach are a highly information-intensive business. In it, the ability to deliver reliable price formation, global liquidity, and network benefits is increasingly critical for the choice of currency denomination. Conversely, the exchange value and prospective usefulness of small currencies becomes less certain, and transaction costs for them may rise. Economic instability is invited as currency and portfolio substitution with the dominant international currency denomination increase the likelihood of currency mismatches and financial crises. In view of these failings of many of the financially small currencies, the number of currencies worldwide well may shrink greatly in the decades ahead.
Drawing lessons mostly from contemporary developments, this book analyzes current approaches to overcoming excessive monetary division within integrating regions. It focuses on the effects of monetary or currency unions on trade among members and on their financial development and stability. In the process, contributors analyze the promise and subversion of hard pegs such as that attempted by the currency board of Argentina. They also examine unilateral dollarization -- adopted in a few countries formally, and in many more informally without giving up the local currency -- and multilateral monetary union in Europe. There the euro functions as an innovative, non-hegemonic form of internationally shared and co-managed fiat money that will also be adopted by the 2004 class of European-Union accession countries in coming years.
Kenneth Dyson and Kevin Featherstone
- Published in print:
- 1999
- Published Online:
- November 2003
- ISBN:
- 9780198296386
- eISBN:
- 9780191599125
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/019829638X.003.0001
- Subject:
- Political Science, European Union
The negotiation of EMU is situated in an historical context, notably the mounting tensions in the post‐war Bretton Woods system, the Hague Summit of 1969, the eventual collapse of Bretton Woods and ...
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The negotiation of EMU is situated in an historical context, notably the mounting tensions in the post‐war Bretton Woods system, the Hague Summit of 1969, the eventual collapse of Bretton Woods and the creation of the European Monetary System in 1978–79. An account is given of the relaunch of EMU in 1988, of the start of the detailed negotiations, of the nature and significance of the Maastricht Agreement, and of the end game in 1991.Less
The negotiation of EMU is situated in an historical context, notably the mounting tensions in the post‐war Bretton Woods system, the Hague Summit of 1969, the eventual collapse of Bretton Woods and the creation of the European Monetary System in 1978–79. An account is given of the relaunch of EMU in 1988, of the start of the detailed negotiations, of the nature and significance of the Maastricht Agreement, and of the end game in 1991.
Akinobu Kuroda
- Published in print:
- 2005
- Published Online:
- July 2005
- ISBN:
- 9780198292715
- eISBN:
- 9780191602580
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198292715.003.0005
- Subject:
- Economics and Finance, South and East Asia
This chapter offers an interpretation of the way in which the Chinese imperial monetary system disintegrated in the early 20th century, and was replaced by a system that allowed for international ...
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This chapter offers an interpretation of the way in which the Chinese imperial monetary system disintegrated in the early 20th century, and was replaced by a system that allowed for international integration. It suggests that securing local liquidity during the harvest seasons had been an essential factor for the development of the agrarian empire. The local peasant economy's needs were served by copper cash, and silver, which served as the main means of settlement for regional and external trade, functioned in tandem with copper, rather than independently. The establishment of the international gold standard, and the successive adoption of the gold or gold exchange standard in India, Japan, and the Straits Settlements from the end of the 19th century to the early 20th century made it more and more difficult for China to sustain its engagement in international trade and overseas remittances while preserving its own monetary regime.Less
This chapter offers an interpretation of the way in which the Chinese imperial monetary system disintegrated in the early 20th century, and was replaced by a system that allowed for international integration. It suggests that securing local liquidity during the harvest seasons had been an essential factor for the development of the agrarian empire. The local peasant economy's needs were served by copper cash, and silver, which served as the main means of settlement for regional and external trade, functioned in tandem with copper, rather than independently. The establishment of the international gold standard, and the successive adoption of the gold or gold exchange standard in India, Japan, and the Straits Settlements from the end of the 19th century to the early 20th century made it more and more difficult for China to sustain its engagement in international trade and overseas remittances while preserving its own monetary regime.
Marc Flandreau and François Gallice
- Published in print:
- 2005
- Published Online:
- September 2007
- ISBN:
- 9780199269495
- eISBN:
- 9780191710162
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199269495.003.0005
- Subject:
- Business and Management, Finance, Accounting, and Banking
This chapter deals with one aspect of short-term capital movements over the period 1885-1913. It studies the role of the French haute banque in the operation of the international monetary system. It ...
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This chapter deals with one aspect of short-term capital movements over the period 1885-1913. It studies the role of the French haute banque in the operation of the international monetary system. It adopts a monographic approach, examining the international balances of the Banque de Paris et des Pays-Bas (Paribas), in an attempt to reinterpret what is known of the pre-1914 international money market's structure. The novelty of this methodology is that it uses microeconomics as a financial probe to reveal a number of more general problems. This is in contrast with macroeconomic studies of statistical interrelations among national interest rates which treat markets as black boxes.Less
This chapter deals with one aspect of short-term capital movements over the period 1885-1913. It studies the role of the French haute banque in the operation of the international monetary system. It adopts a monographic approach, examining the international balances of the Banque de Paris et des Pays-Bas (Paribas), in an attempt to reinterpret what is known of the pre-1914 international money market's structure. The novelty of this methodology is that it uses microeconomics as a financial probe to reveal a number of more general problems. This is in contrast with macroeconomic studies of statistical interrelations among national interest rates which treat markets as black boxes.
Tommaso Padoa‐Schioppa
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780199241767
- eISBN:
- 9780191596742
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199241767.003.0004
- Subject:
- Economics and Finance, Macro- and Monetary Economics
Few proposals have been made for the reform of what used to be called the international monetary system, and academic economists have tended to ignore the experience of the European Monetary System ...
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Few proposals have been made for the reform of what used to be called the international monetary system, and academic economists have tended to ignore the experience of the European Monetary System (EMS) in their research. An account is given here of this experience. It addresses the functioning of the EMS, considers desirable developments, and examines the difficulties that such developments are likely to encounter.Less
Few proposals have been made for the reform of what used to be called the international monetary system, and academic economists have tended to ignore the experience of the European Monetary System (EMS) in their research. An account is given here of this experience. It addresses the functioning of the EMS, considers desirable developments, and examines the difficulties that such developments are likely to encounter.
Erik Jones
- Published in print:
- 2008
- Published Online:
- September 2008
- ISBN:
- 9780199208333
- eISBN:
- 9780191708985
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199208333.003.0005
- Subject:
- Political Science, Comparative Politics, Political Economy
This chapter analyses the adjustment strategies pursued by Wilfried Martens in Belgium (Poupehan) and Ruud Lubbers in the Netherlands (Wassenaar). It shows how they were able to restart price-incomes ...
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This chapter analyses the adjustment strategies pursued by Wilfried Martens in Belgium (Poupehan) and Ruud Lubbers in the Netherlands (Wassenaar). It shows how they were able to restart price-incomes policy within the context of the European monetary system and so to recapture competitiveness by depreciating the real exchange rate. It also explains how difficult this policy was to initiate politically. Once started, however, the policy was both effective and easy to maintain. What was more difficult to control was the political reactions. When Martens and Lubbers lost power in the 1990s, they augured the end of Christian Democratic hegemony in both countries — in the Netherlands by 1994 and in Belgium by 1999.Less
This chapter analyses the adjustment strategies pursued by Wilfried Martens in Belgium (Poupehan) and Ruud Lubbers in the Netherlands (Wassenaar). It shows how they were able to restart price-incomes policy within the context of the European monetary system and so to recapture competitiveness by depreciating the real exchange rate. It also explains how difficult this policy was to initiate politically. Once started, however, the policy was both effective and easy to maintain. What was more difficult to control was the political reactions. When Martens and Lubbers lost power in the 1990s, they augured the end of Christian Democratic hegemony in both countries — in the Netherlands by 1994 and in Belgium by 1999.
Tommaso Padoa‐Schioppa
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780199241767
- eISBN:
- 9780191596742
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199241767.003.0013
- Subject:
- Economics and Finance, Macro- and Monetary Economics
The concluding essay in the book, written in 1994. It summarizes the factors and events that led to the signing of the Maastricht Treaty in February 1992, and then gives the author's interpretation ...
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The concluding essay in the book, written in 1994. It summarizes the factors and events that led to the signing of the Maastricht Treaty in February 1992, and then gives the author's interpretation of events between the late spring of 1992 and early 1994, when the process of ratification and the crisis of the European Monetary System (EMS) interacted so powerfully. The concluding section reflects on the problems of implementing the treaty.Less
The concluding essay in the book, written in 1994. It summarizes the factors and events that led to the signing of the Maastricht Treaty in February 1992, and then gives the author's interpretation of events between the late spring of 1992 and early 1994, when the process of ratification and the crisis of the European Monetary System (EMS) interacted so powerfully. The concluding section reflects on the problems of implementing the treaty.
Christopher M.D. Wilkie
- Published in print:
- 2011
- Published Online:
- January 2012
- ISBN:
- 9780199606467
- eISBN:
- 9780191731648
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199606467.003.0004
- Subject:
- Economics and Finance, Macro- and Monetary Economics
SDRs could not prop up a Bretton Woods system without US support. And it is true that the SDR was no longer a priority for the US as post‐Bretton Woods arrangements consolidated themselves. ...
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SDRs could not prop up a Bretton Woods system without US support. And it is true that the SDR was no longer a priority for the US as post‐Bretton Woods arrangements consolidated themselves. Importantly, however, the US embrace of post‐Bretton Woods arrangements also included an accommodation of an SDR under the new system. The European Community and then European Union, as well as the IMF itself, also lost interest in the SDR as the complexities of both US international economic policy determination and international monetary governance intensified.Less
SDRs could not prop up a Bretton Woods system without US support. And it is true that the SDR was no longer a priority for the US as post‐Bretton Woods arrangements consolidated themselves. Importantly, however, the US embrace of post‐Bretton Woods arrangements also included an accommodation of an SDR under the new system. The European Community and then European Union, as well as the IMF itself, also lost interest in the SDR as the complexities of both US international economic policy determination and international monetary governance intensified.
Dominick Salvatore
- Published in print:
- 2004
- Published Online:
- August 2004
- ISBN:
- 9780199271405
- eISBN:
- 9780191601200
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199271402.003.0002
- Subject:
- Economics and Finance, Economic Systems
A great debate has been taking place in many nations, especially small ones, in Central, Eastern, and Southern Europe, in the Baltic States, and in the Americas on the need and benefits of abandoning ...
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A great debate has been taking place in many nations, especially small ones, in Central, Eastern, and Southern Europe, in the Baltic States, and in the Americas on the need and benefits of abandoning the national currency in favor of the euro or the dollar. This chapter examines the benefits and costs of euroization or dollarization. It analyzes the ways in which the two processes are similar and different, and it examines their likely effect on the functioning of the present and future international monetary system.Less
A great debate has been taking place in many nations, especially small ones, in Central, Eastern, and Southern Europe, in the Baltic States, and in the Americas on the need and benefits of abandoning the national currency in favor of the euro or the dollar. This chapter examines the benefits and costs of euroization or dollarization. It analyzes the ways in which the two processes are similar and different, and it examines their likely effect on the functioning of the present and future international monetary system.
Elio Lo Cascio
- Published in print:
- 2008
- Published Online:
- May 2008
- ISBN:
- 9780199233359
- eISBN:
- 9780191716348
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199233359.003.0009
- Subject:
- Classical Studies, European History: BCE to 500CE
This chapter examines the function of gold coins in the Roman Empire. Using evidence of Duncan-Jones's demonstration that gold coins show markedly less weight loss than silver coins, it is argued ...
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This chapter examines the function of gold coins in the Roman Empire. Using evidence of Duncan-Jones's demonstration that gold coins show markedly less weight loss than silver coins, it is argued that the former were often used as a slowly circulating store of value. However, gold coins were widely used to make actual payments. The chapter reconstructs the story of how the 3rd-century monetary system collapsed, to be succeeded by the new system founded on the regular use of the gold solidus and its fractions.Less
This chapter examines the function of gold coins in the Roman Empire. Using evidence of Duncan-Jones's demonstration that gold coins show markedly less weight loss than silver coins, it is argued that the former were often used as a slowly circulating store of value. However, gold coins were widely used to make actual payments. The chapter reconstructs the story of how the 3rd-century monetary system collapsed, to be succeeded by the new system founded on the regular use of the gold solidus and its fractions.
Christopher Wilkie
- Published in print:
- 2011
- Published Online:
- January 2012
- ISBN:
- 9780199606467
- eISBN:
- 9780191731648
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199606467.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
Following the Rio Agreement in 1967, the birth of the Special Drawing Right (SDR) was widely heralded as the first step towards a world international money. The SDR's intended purpose, though, was ...
More
Following the Rio Agreement in 1967, the birth of the Special Drawing Right (SDR) was widely heralded as the first step towards a world international money. The SDR's intended purpose, though, was more modest: to help salvage the prevailing international monetary system which had evolved since Bretton Woods. This volume examines the relatively recent and important history of SDRs—what they are, where they came from, and why they are significant. This book considers the changing roles and influences of the US and the International Monetary Fund (IMF) as post‐Bretton Woods monetary arrangements established themselves. Despite their retreat from early acclaim, work continued, particularly at the Fund, on enhancing the potential of SDRs to contribute to international monetary stability, and SDRs have recently re‐emerged as a potential source of support and stability for the international monetary system underpinning the world economy. The SDR, and the debate surrounding it, is an excellent prism through which to examine other important themes in contemporary international political economy, including international liquidity provision and international monetary reform. Ultimately, the policies of the US, the IMF, and the changing nature of the relationship between them emerge as fundamental themes for an understanding of prospects for SDRs under post‐Bretton Woods international monetary arrangements. Today, the promise and disappointment that has characterized the short history of SDRs is more important than ever as the world again examines these arrangements in the wake of the international financial crisis.Less
Following the Rio Agreement in 1967, the birth of the Special Drawing Right (SDR) was widely heralded as the first step towards a world international money. The SDR's intended purpose, though, was more modest: to help salvage the prevailing international monetary system which had evolved since Bretton Woods. This volume examines the relatively recent and important history of SDRs—what they are, where they came from, and why they are significant. This book considers the changing roles and influences of the US and the International Monetary Fund (IMF) as post‐Bretton Woods monetary arrangements established themselves. Despite their retreat from early acclaim, work continued, particularly at the Fund, on enhancing the potential of SDRs to contribute to international monetary stability, and SDRs have recently re‐emerged as a potential source of support and stability for the international monetary system underpinning the world economy. The SDR, and the debate surrounding it, is an excellent prism through which to examine other important themes in contemporary international political economy, including international liquidity provision and international monetary reform. Ultimately, the policies of the US, the IMF, and the changing nature of the relationship between them emerge as fundamental themes for an understanding of prospects for SDRs under post‐Bretton Woods international monetary arrangements. Today, the promise and disappointment that has characterized the short history of SDRs is more important than ever as the world again examines these arrangements in the wake of the international financial crisis.
Christopher M.D. Wilkie
- Published in print:
- 2011
- Published Online:
- January 2012
- ISBN:
- 9780199606467
- eISBN:
- 9780191731648
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199606467.003.0005
- Subject:
- Economics and Finance, Macro- and Monetary Economics
Delving further into US policy determination provides other clues as to why SDRs became marginalized in the late 1970s and 1980s. For instance, US international monetary policy determination was ...
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Delving further into US policy determination provides other clues as to why SDRs became marginalized in the late 1970s and 1980s. For instance, US international monetary policy determination was affected by increased Congressional interest in the asset—with the Watergate scandal providing the dramatic backdrop for changing dynamics between the legislative and executive branches of government. These changing dynamics continue to characterize international economic policy determination in the US today, as does the role of the Federal Reserve. Not surprisingly, they also adversely affected prospects for the SDR.Less
Delving further into US policy determination provides other clues as to why SDRs became marginalized in the late 1970s and 1980s. For instance, US international monetary policy determination was affected by increased Congressional interest in the asset—with the Watergate scandal providing the dramatic backdrop for changing dynamics between the legislative and executive branches of government. These changing dynamics continue to characterize international economic policy determination in the US today, as does the role of the Federal Reserve. Not surprisingly, they also adversely affected prospects for the SDR.
Isaac Nakhimovsky
- Published in print:
- 2011
- Published Online:
- October 2017
- ISBN:
- 9780691148946
- eISBN:
- 9781400838752
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691148946.003.0004
- Subject:
- Political Science, Political Theory
This chapter reveals that Fichte's proposal for a planned economy was an application of widespread eighteenth-century thinking about the positive possibilities created by modern finance: in this ...
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This chapter reveals that Fichte's proposal for a planned economy was an application of widespread eighteenth-century thinking about the positive possibilities created by modern finance: in this view, the state's ability to control the monetary system created an unprecedented opportunity to bring about a moral transformation of economic relations. It held out the promise of restoring a greater measure of equality to the modern division of labor without requiring massive expropriations or reversing the centuries of growth and development that had been fueled by the expansion of trade. For many other eighteenth-century minds, however, giving a government control over the money supply was a recipe for a new form of complete despotism.Less
This chapter reveals that Fichte's proposal for a planned economy was an application of widespread eighteenth-century thinking about the positive possibilities created by modern finance: in this view, the state's ability to control the monetary system created an unprecedented opportunity to bring about a moral transformation of economic relations. It held out the promise of restoring a greater measure of equality to the modern division of labor without requiring massive expropriations or reversing the centuries of growth and development that had been fueled by the expansion of trade. For many other eighteenth-century minds, however, giving a government control over the money supply was a recipe for a new form of complete despotism.
Ranald C. Michie
- Published in print:
- 2006
- Published Online:
- September 2007
- ISBN:
- 9780199280612
- eISBN:
- 9780191712784
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199280612.003.0009
- Subject:
- Economics and Finance, Economic History
This chapter discusses developments in the global securities market from 1970 to 1990. It shows that growth and development in the global securities market in the 1970s and 1980s were marked by two ...
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This chapter discusses developments in the global securities market from 1970 to 1990. It shows that growth and development in the global securities market in the 1970s and 1980s were marked by two major turning points: the abolition of fixed commissions on the New York Stock Exchange in May 1975, which put pressure on stock exchanges in the US and around the world; and the Big Bang in London in October 1986, which not only transformed the British securities market but also intensified the pressure for change which had already been experienced by other stock exchanges, especially in Europe. By 1990, the effects of these twin developments were visible worldwide. The securities markets re-emerged as essential components of national financial systems whilst the global securities market once again became a key element in the financial flows that brought stability to the international monetary system.Less
This chapter discusses developments in the global securities market from 1970 to 1990. It shows that growth and development in the global securities market in the 1970s and 1980s were marked by two major turning points: the abolition of fixed commissions on the New York Stock Exchange in May 1975, which put pressure on stock exchanges in the US and around the world; and the Big Bang in London in October 1986, which not only transformed the British securities market but also intensified the pressure for change which had already been experienced by other stock exchanges, especially in Europe. By 1990, the effects of these twin developments were visible worldwide. The securities markets re-emerged as essential components of national financial systems whilst the global securities market once again became a key element in the financial flows that brought stability to the international monetary system.
Hanaa Kheir-El-Din
- Published in print:
- 2008
- Published Online:
- September 2011
- ISBN:
- 9789774161544
- eISBN:
- 9781617970306
- Item type:
- chapter
- Publisher:
- American University in Cairo Press
- DOI:
- 10.5743/cairo/9789774161544.003.0003
- Subject:
- Political Science, Political Economy
This chapter examines the effect of recent changes in the structure of the monetary policy in Egypt on the monetary system and on the performance of the economy. It is organized as follows. Section 1 ...
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This chapter examines the effect of recent changes in the structure of the monetary policy in Egypt on the monetary system and on the performance of the economy. It is organized as follows. Section 1 presents a brief historical overview that delineates the main objectives, targets, and instruments of the policy of the Central Bank of Egypt (CBE) since the beginning of the 1990s. Section 2 evaluates the existing measures and direction of monetary policy from the mid-1980s to 2005 using a structural vector autoregression (VAR) that is chosen from a model that nests different possible descriptions of the CBE operating procedures. The selected VAR model is employed for measuring the changes in the stance during the period under investigation. Section 3 considers that model as a point of departure to describe the effect of monetary policy shocks on real output subject to different stylized structural restrictions. Section 4 attempts to identify an underlying monetary policy rule for the CBE and to predict how real output, the interest rate, and inflation respond to stochastic disturbances in that rule using a structural VAR model, while Section 5 concludes.Less
This chapter examines the effect of recent changes in the structure of the monetary policy in Egypt on the monetary system and on the performance of the economy. It is organized as follows. Section 1 presents a brief historical overview that delineates the main objectives, targets, and instruments of the policy of the Central Bank of Egypt (CBE) since the beginning of the 1990s. Section 2 evaluates the existing measures and direction of monetary policy from the mid-1980s to 2005 using a structural vector autoregression (VAR) that is chosen from a model that nests different possible descriptions of the CBE operating procedures. The selected VAR model is employed for measuring the changes in the stance during the period under investigation. Section 3 considers that model as a point of departure to describe the effect of monetary policy shocks on real output subject to different stylized structural restrictions. Section 4 attempts to identify an underlying monetary policy rule for the CBE and to predict how real output, the interest rate, and inflation respond to stochastic disturbances in that rule using a structural VAR model, while Section 5 concludes.
José Antonio Ocampo
- Published in print:
- 2010
- Published Online:
- February 2010
- ISBN:
- 9780199578801
- eISBN:
- 9780191723285
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199578801.003.0016
- Subject:
- Economics and Finance, Macro- and Monetary Economics, Financial Economics
Ocampo argues that the current global reserve system exhibits three fundamental flaws. First, it shows the deflationary bias typical of any system in which all the burden of adjustment falls on ...
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Ocampo argues that the current global reserve system exhibits three fundamental flaws. First, it shows the deflationary bias typical of any system in which all the burden of adjustment falls on deficit countries (the anti‐Keynesian bias). Second, it is inherently unstable due to two distinct features: the use of a national currency as the major reserve asset (the Triffin dilemma) and the high demand for “self‐protection” that developing countries face (the inequity‐instability link). The latter is related, in turn, to the mix of highly pro‐cyclical capital flows and the absence of adequate supply of “collective insurance” to manage balance of payments crises, which generate a high demand for foreign exchange reserves by developing countries. This implies, third, that the system is inequitable (the inequity bias), and that such inequities have grown as developing countries have accumulated large quantities of foreign exchange reserves. On the basis of this, it argues for a system based on the counter‐cyclical issues of Special Drawing Rights (SDRs) that finance IMF facilities, and some possible “development links” in SDR allocations.Less
Ocampo argues that the current global reserve system exhibits three fundamental flaws. First, it shows the deflationary bias typical of any system in which all the burden of adjustment falls on deficit countries (the anti‐Keynesian bias). Second, it is inherently unstable due to two distinct features: the use of a national currency as the major reserve asset (the Triffin dilemma) and the high demand for “self‐protection” that developing countries face (the inequity‐instability link). The latter is related, in turn, to the mix of highly pro‐cyclical capital flows and the absence of adequate supply of “collective insurance” to manage balance of payments crises, which generate a high demand for foreign exchange reserves by developing countries. This implies, third, that the system is inequitable (the inequity bias), and that such inequities have grown as developing countries have accumulated large quantities of foreign exchange reserves. On the basis of this, it argues for a system based on the counter‐cyclical issues of Special Drawing Rights (SDRs) that finance IMF facilities, and some possible “development links” in SDR allocations.
Bruce Greenwald and Joseph E. Stiglitz
- Published in print:
- 2010
- Published Online:
- February 2010
- ISBN:
- 9780199578801
- eISBN:
- 9780191723285
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199578801.003.0017
- Subject:
- Economics and Finance, Macro- and Monetary Economics, Financial Economics
Greenwald and Stiglitz argue that an ideal system of international payments should be characterized by stability and balance: stability in exchange rates and the absence of sudden crises, and balance ...
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Greenwald and Stiglitz argue that an ideal system of international payments should be characterized by stability and balance: stability in exchange rates and the absence of sudden crises, and balance in the sense that individual national economies should suffer neither from deflationary effects of chronic external deficits nor the distorting consequences of chronic external surpluses. Both requirements are essential to the efficient international movement of goods and resources. Yet neither requirement appears to have been met by the current dollar‐based reserve currency system. Recurrent crises in Asia, Latin America, and Eastern Europe, and chronic and growing U.S. payments deficits (with their associated deflationary impact) are longstanding characteristics of the current system.Less
Greenwald and Stiglitz argue that an ideal system of international payments should be characterized by stability and balance: stability in exchange rates and the absence of sudden crises, and balance in the sense that individual national economies should suffer neither from deflationary effects of chronic external deficits nor the distorting consequences of chronic external surpluses. Both requirements are essential to the efficient international movement of goods and resources. Yet neither requirement appears to have been met by the current dollar‐based reserve currency system. Recurrent crises in Asia, Latin America, and Eastern Europe, and chronic and growing U.S. payments deficits (with their associated deflationary impact) are longstanding characteristics of the current system.
DAVID MCKAY
- Published in print:
- 1999
- Published Online:
- October 2011
- ISBN:
- 9780198296775
- eISBN:
- 9780191685279
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198296775.003.0005
- Subject:
- Political Science, European Union
This chapter mentions some of the potential anomalies in the European Monetary System (EMS). It also consists of brief case-studies of those countries most affected by the crises and concentrates on ...
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This chapter mentions some of the potential anomalies in the European Monetary System (EMS). It also consists of brief case-studies of those countries most affected by the crises and concentrates on the political and economic context in which key decisions to cope with the crisis occurred. Focus is placed on the Nordic countries (Finland, Norway, and Sweden), the UK, Italy, Spain, and France. Special attention is given to the Nordic countries where, it is argued, the advantages of striking a federal bargain with the European Union became the conventional wisdom during this period. The main argument of this chapter is that the enormous economic and political sacrifices endured by a range of European countries during the exchange rate turmoil of 1992 and 1993 can only be understood in the context of the federal bargain concluded at Maastricht. The most noteworthy characteristic of the 1992 and 1993 currency crises was probably the degree of consensus across political parties that there was no alternative but to defend exchange rate parities.Less
This chapter mentions some of the potential anomalies in the European Monetary System (EMS). It also consists of brief case-studies of those countries most affected by the crises and concentrates on the political and economic context in which key decisions to cope with the crisis occurred. Focus is placed on the Nordic countries (Finland, Norway, and Sweden), the UK, Italy, Spain, and France. Special attention is given to the Nordic countries where, it is argued, the advantages of striking a federal bargain with the European Union became the conventional wisdom during this period. The main argument of this chapter is that the enormous economic and political sacrifices endured by a range of European countries during the exchange rate turmoil of 1992 and 1993 can only be understood in the context of the federal bargain concluded at Maastricht. The most noteworthy characteristic of the 1992 and 1993 currency crises was probably the degree of consensus across political parties that there was no alternative but to defend exchange rate parities.
