First Published in 2005. The book has two principal aims. First, to provide a description of the major international monetary developments in the industrial world in the post-war years. Second, to evaluate and analyse these developments by reference to a theoretical framework and, in addition, to look at the key policy issues in the context of the new environment of the last decade.
Preface xi
A Summary Perspective on the Issues 1
PART ONE{emsp}International Monetary Regimes and the Euro-Dollar System
{ensp}1 The Gold Standard Regime 11
{ensp}2 The IMF System 21
{ensp}3 The Postwar Experience – 1946 to 1967 31
{ensp}4 Reform Proposals – Mark I: The Early 1960s 45
{ensp}5 Special Drawing Rights (SDRs) 54
{ensp}6 Continuing Crises and the Breakdown of Bretton Woods 60
{ensp}7 The Growth of the Euro-Currency System 68
{ensp}8 The Oil Price Shock of 1974 – Financial Impacts 88
{ensp}9 Deficiencies of the IMF System and Reasons for Its Collapse 98
10 Reforms and Reform Discussions – Mark II: 1968 to 1978 104
PART TWO{emsp}The Analytical Framework for an Open Economy
11 A Neo-Keynesian Model of Aggregate Demand and Aggregate Supply 119
12 Monetarist Models – I: The Expectations-Augmented Phillips Curve and the Natural Rate of Unemployment 131
13 Monetarist Models – II: A Two-Sector Model 142
14 The Choice of Model – Issues and Evidence 149
PART THREE{emsp}Global Inflation and Unemployment
15 Theories of Global Inflation – the 1970s 163
16 Public Sector Growth and Inflation – 1965 to 1975 174
17 Global Inflation – the Evidence 182
18 The Downturn (1974–1975) and the Conservative Reaction (1976–1978) 195
PART FOUR{emsp}Managed Floats – 1973 to 1978
19 The Forward Market – Analysis and Evidence 211
20 Exchange Rate Behaviour – Theoretical Analysis 227
21 Exchange Rate Behaviour – the Evidence 249
PART FIVE{emsp}Choice of Exchange Rate Regime
22 The Effectiveness of Macro-Policy 273
23 Insulation of the Domestic Economy from Random Disturbances 286
24 Exchange Rate Regime – World Inflation and Unemployment 295
25 Exchange Rate Flexibility, Trade, Reserve Demand and Vicious Circles 303
26 Costs and Benefits of a Managed Float 313
27 Monetary Unions – Analysis and Application to the EEC 319
PART SIX{emsp}Macro-Policy
28 Conventional Macro-Policy – Targets, Instruments and Assignments 339
29 The New Economic Environment and Its Policy Implications 354
30 Policies for Stagflation – I: A Review of Some Proposals 372
31 Policies for Stagflation – II: Prices and Incomes Policies (PIP) 387
32 A Framework for Macro-Policy 401 Bibliography 411 Index 435
