国际商务第十一章

InternationalBusiness

9eByCharlesW.L.HillMcGraw-Hill/IrwinCopyright©2013byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Chapter11TheInternationalMonetarySystemWhatIsTheInternationalMonetarySystem?TheinternationalmonetarysystemreferstotheinstitutionalarrangementsthatcountriesadopttogovernexchangeratesAfloatingexchangeratesystemexistswhenacountryallowstheforeignexchangemarkettodeterminetherelativevalueofacurrencytheU.S.dollar,theEUeuro,theJapaneseyen,andtheBritishpoundallfloatfreelyagainsteachothertheirvaluesaredeterminedbymarketforcesandfluctuatedaytodayWhatIsTheInternationalMonetarySystem?ApeggedexchangeratesystemexistswhenacountryfixesthevalueofitscurrencyrelativetoareferencecurrencymanyGulfstatespegtheircurrenciestotheU.S.dollarAdirtyfloat

existswhenacountrytriestoholdthevalueofitscurrencywithinsomerangeofareferencecurrencysuchastheU.S.dollarChinapegstheyuantoabasketofothercurrenciesWhatIsTheInternationalMonetarySystem?AfixedexchangeratesystemexistswhencountriesfixtheircurrenciesagainsteachotheratsomemutuallyagreedonexchangerateEuropeanMonetarySystem(EMS)priorto1999WhatWasTheGoldStandard?Thegoldstandardreferstoasysteminwhichcountriespegcurrenciestogoldandguaranteetheirconvertibilitythegoldstandarddatesbacktoancienttimeswhengoldcoinswereamediumofexchange,unitofaccount,andstoreofvaluepaymentforimportswasmadeingoldorsilverWhatWasTheGoldStandard?later,paymentwasmadeinpapercurrencywhichwaslinkedtogoldatafixedrateinthe1880s,mostnationsfollowedthegoldstandard$1=23.22grainsof“fine”(pure)goldthegoldparvaluereferstotheamountofacurrencyneededtopurchaseoneounceofgoldWhyDidThe

GoldStandardMakeSense?

Thegreatstrengthofthegoldstandardwasthatitcontainedapowerfulmechanismforachievingbalance-of-tradeequilibriumbyallcountrieswhentheincomeacountry’sresidentsearnfromitsexportsisequaltothemoneyitsresidentspayforimportsItisthisfeaturethatcontinuestopromptcallstoreturntoagoldstandardWhyDidThe

GoldStandardMakeSense?

Thegoldstandardworkedwellfromthe1870suntil1914but,manygovernmentsfinancedtheirWorldWarIexpendituresbyprintingmoneyandso,createdinflationPeoplelostconfidenceinthesystemdemandedgoldfortheircurrencyputtingpressureoncountries'goldreserves,andforcingthemtosuspendgoldconvertibilityBy1939,thegoldstandardwasdeadWhatWasThe

BrettonWoodsSystem?In1944,representativesfrom44countriesmetatBrettonWoods,NewHampshire,todesignanewinternationalmonetarysystemthatwouldfacilitatepostwareconomicgrowthUnderthenewagreementafixedexchangeratesystemwasestablishedallcurrencieswerefixedtogold,butonlytheU.S.dollarwasdirectlyconvertibletogolddevaluationscouldnottobeusedforcompetitivepurposesacountrycouldnotdevalueitscurrencybymorethan10%withoutIMFapprovalWhatInstitutionsWereEstablishedAtBrettonWoods?TheBrettonWoodsagreementalsoestablishedtwomultinationalinstitutionsTheInternationalMonetaryFund(IMF)tomaintainorderintheinternationalmonetarysystemthroughacombinationofdisciplineandflexibilityTheWorldBanktopromotegeneraleconomicdevelopmentalsocalledtheInternationalBankforReconstructionandDevelopment(IBRD)WhatInstitutionsWereEstablishedAtBrettonWoods?TheInternationalMonetaryFund

(IMF)fixedexchangeratesstoppedcompetitivedevaluationsandbroughtstabilitytotheworldtradeenvironmentfixedexchangeratesimposedmonetarydisciplineoncountries,limitingpriceinflationincasesoffundamentaldisequilibrium,devaluationswerepermittedtheIMFlentforeigncurrenciestomembersduringshortperiodsofbalance-of-paymentsdeficit,whenarapidtighteningofmonetaryorfiscalpolicywouldhurtdomesticemploymentWhatInstitutionsWereEstablishedAtBrettonWoods?TheWorldBank

CountriescanborrowfromtheWorldBankintwowaysUndertheIBRDscheme,moneyisraisedthroughbondsalesintheinternationalcapitalmarketborrowerspayamarketrateofinterest-thebank'scostoffundsplusamarginforexpenses.ThroughtheInternationalDevelopmentAgency,anarmofthebankcreatedin1960IDAloansgoonlytothepoorestcountriesWhyDidTheFixedExchangeRateSystemCollapse?BrettonWoodsworkedwelluntilthelate1960sItcollapsedwhenhugeincreasesinwelfareprogramsandtheVietnamWarwerefinancedbyincreasingthemoneysupplyandcausingsignificantinflationothercountriesincreasedthevalueoftheircurrenciesrelativetotheU.S.dollarinresponsetospeculationthedollarwouldbedevaluedHowever,becausethesystemreliedonaneconomicallywellmanagedU.S.,whentheU.S.begantoprintmoney,runhightradedeficits,andexperiencehighinflation,thesystemwasstrainedtothebreakingpointtheU.S.dollarcameunderspeculativeattackWhatWasThe

JamaicaAgreement?Anewexchangeratesystemwasestablishedin1976atameetinginJamaicaTherulesthatwereagreedonthenarestillinplacetodayUndertheJamaicanagreementfloatingratesweredeclaredacceptablegoldwasabandonedasareserveassettotalannualIMFquotas-theamountmembercountriescontributetotheIMF-wereincreasedto$41billion–todaytheyareabout$300billionWhatHasHappenedToExchangeRatesSince1973?Since1973,exchangerateshavebeenmorevolatileandlesspredictablethantheywerebetween1945and1973becauseofthe1971and1979oilcrisesthelossofconfidenceinthedollarafterU.S.inflationin1977-78theriseinthedollarbetween1980and1985thepartialcollapseoftheEMSin1992the1997Asiancurrencycrisisthedeclineinthedollarfrom2001to2009WhatHasHappenedTo

ExchangeRatesSince1973?MajorCurrenciesDollarIndex,1973-2010WhichIsBetter–Fixed

RatesOrFloatingRates?FloatingexchangeratesprovideMonetarypolicyautonomyremovingtheobligationtomaintainexchangerateparityrestoresmonetarycontroltoagovernmentAutomatictradebalanceadjustmentsunderBrettonWoods,ifacountrydevelopedapermanentdeficitinitsbalanceoftradethatcouldnotbecorrectedbydomesticpolicy,theIMFwouldhavetoagreetoacurrencydevaluationWhichIsBetter–FixedRatesOrFloatingRates?But,afixedexchangeratesystemProvidesmonetarydisciplineensuresthatgovernmentsdonotexpandtheirmoneysuppliesatinflationaryratesMinimizesspeculationcausesuncertaintyReducesuncertaintypromotesgrowthofinternationaltradeandinvestmentWhoIsRight?ThereisnorealagreementastowhichsystemisbetterWeknowthataBrettonWoods-stylefixedexchangerateregimewillnotworkButadifferentkindoffixedexchangeratesystemmightbemoreenduringcouldencouragestabilitythatwouldfacilitatemorerapidgrowthininternationaltradeandinvestmentWhatTypeofExchangeRateSystemIsInPracticeToday?Variousexchangerateregimesarefollowedtoday14%ofIMFmembersfollowafreefloatpolicy26%ofIMFmembersfollowamanagedfloatsystem22%ofIMFmembershavenolegaltenderoftheirownex.EuroZonecountriestheremainingcountriesuselessflexiblesystemssuchaspeggedarrangements,oradjustablepegsWhatTypeofExchangeRateSystemIsInPracticeToday?ExchangeRatePoliciesofIMFMembersWhatIsAPeggedRateSystem?Acountryfollowingapeggedexchangeratesystempegsthevalueofitscurrencytothatofanothermajorcurrencypopularamongtheworld’ssmallernationsimposesmonetarydisciplineandleadstolowinflationadoptingapeggedexchangerateregimecanmoderateinflationarypressuresinacountryWhatIsACurrencyBoard?Countriesusingacurrencyboardcommittoconvertingtheirdomesticcurrencyondemandintoanothercurrencyatafixedexchangeratethecurrencyboardholdsreservesofforeigncurrencyequalatthefixedexchangeratetoatleast100%ofthedomesticcurrencyissuedthecurrencyboardcanissueadditionaldomesticnotesandcoinsonlywhenthereareforeignexchangereservestobackthemWhatIsTheRole

OfTheIMFToday?Today,theIMFfocusesonlendingmoneytocountriesinfinancialcrisisTherearethreemaintypesoffinancialcrises:CurrencycrisisBankingcrisisForeigndebtcrisisWhatIsTheRole

OfTheIMFToday?Acurrencycrisis

occurswhenaspeculativeattackontheexchangevalueofacurrencyresultsinasharpdepreciationinthevalueofthecurrency,orforcesauthoritiestoexpendlargevolumesofinternationalcurrencyreservesandsharplyincreaseinterestratesinordertodefendprevailingexchangeratesBrazil2002WhatIsTheRole

OfTheIMFToday?Abankingcrisisreferstoasituationinwhichalossofconfidenceinthebankingsystemleadstoarunonthebanks,asindividualsandcompanieswithdrawtheirdepositsAforeigndebtcrisisisasituationinwhichacountrycannotserviceitsforeigndebtobligations,whetherprivatesectororgovernmentdebtGreeceandIreland2010WhatWasTheMexicanCurrencyCrisisOf1995?

TheMexicancurrencycrisisof1995wasaresultofhighMexicandebtsapeggedexchangeratethatdidnotallowforanaturaladjustmentofpricesTokeepMexicofromdefaultingonitsdebt,theIMFcreateda$50billionaidpackagerequiredtightmonetarypolicyandcutsinpublicspendingWhatWasThe

AsianCurrencyCrisis?The1997SoutheastAsianfinancialcrisiswascausedbyeventsthattookplaceinthepreviousdecadeincludingAninvestmentboom-fueledbyhugeincreasesinexportsExcesscapacity-investmentswerebasedonprojectionsoffuturedemandconditionsHighdebt-investmentsweresupportedbydollar-baseddebtsExpandingimports–causedcurrentaccountdeficitsWhatWasThe

AsianCurrencyCrisis?Bymid-1997,severalkeyThaifinancialinstitutionswereonthevergeofdefaultspeculationagainstthebahtThailandabandonedthebahtpegandallowedthecurrencytofloatTheIMFprovideda$17billionbailoutloanpackagerequiredhighertaxes,publicspendingcuts,privatizationofstate-ownedbusinesses,andhigherinterestratesWhatWasThe

AsianCurrencyCrisis?SpeculationcausedotherAsiancurrenciesincludingtheMalaysianRinggit,theIndonesianRupaihandtheSingaporeDollartofallThesedevaluationsweremainlydrivenby

excessinvestmentandhighborrowings,muchofitindollardenominateddebtadeterioratingbalanceofpaymentspositionWhatWasThe

AsianCurrencyCrisis?TheIMFprovideda$37billionaidpackageforIndonesiarequiredpublicspendingcuts,closureoftroubledbanks,abalancedbudget,andanendtocronycapitalismTheIMFprovideda$55billionaidpackagetoSouthKorearequiredamoreopenbankingsystemandeconomy,andrestraintbychaebolHowHasTheIMFDone?By2010,theIMFwascommittingloansto68countriesineconomicandcurrencycrisisAllIMFloanpackagesrequiretightmacroeconomicandmonetarypolicyHowever,criticsworrythe“one-size-fits-all”approachtomacroeconomicpolicyisinapp