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OverviewThis book deals with the financial side of international economics and covers all aspects of international finance. There are many books and articles by exponents of alternative points of view. I know of no other book that provides the scope, balance, objectivity and rigor of the book. Professor Jerome L. Stein, Brown University. From the reviews - In this survey of international finance and open-economy macroeconomics, Gandolfo succeeds in meeting the needs of advanced undergraduate or lower-level graduate students through a largely textual and graphical approach, while at the same time presenting in the appendices explicit mathematical analyses for more advanced graduate students. (Journal of Banking & Finance 2004) Full Product DetailsAuthor: G. GandolfoPublisher: Springer-Verlag Berlin and Heidelberg GmbH & Co. KG Imprint: Springer-Verlag Berlin and Heidelberg GmbH & Co. K Edition: Softcover reprint of the original 1st ed. 2002 Dimensions: Width: 15.60cm , Height: 3.20cm , Length: 23.40cm Weight: 0.884kg ISBN: 9783540434597ISBN 10: 3540434593 Pages: 636 Publication Date: 26 June 2002 Audience: Professional and scholarly , Professional & Vocational Replaced By: 9783662498606 Format: Paperback Publisher's Status: Active Availability: Out of print, replaced by POD We will order this item for you from a manufatured on demand supplier. Table of Contents1 Introduction.- 1.1 Old and New Approaches to International Finance.- 1.2 Structure of the Book.- 1.3 Small and Large Open Economies.- 1.4 References.- I The Basics.- 2 The Foreign Exchange Market.- 2.1 Introduction.- 2.2 The Spot Exchange Market.- 2.3 The Real Exchange Rate.- 2.4 The Effective Exchange Rate.- 2.5 The Forward Exchange Market.- 2.5.1 Introduction.- 2.5.2 Various Covering Alternatives; Forward Premium and Discount.- 2.6 The Transactors in the Foreign Exchange Market.- 2.6.1 Speculators.- 2.6.2 Non-Speculators.- 2.6.3 Monetary Authorities.- 2.7 Currency Derivatives.- 2.7.1 Futures.- 2.7.2 Options.- 2.7.3 Swap Transactions.- 2.8 Eurodollars and Xeno-Currencies.- 2.9 References.- 3 Exchange-Rate Regimes.- 3.1 The Two Extremes.- 3.2 The Bretton Woods System.- 3.2.1 The Monetary Authorities' Intervention.- 3.3 Other Limited-Flexibility Systems.- 3.4 The Current Nonsystem.- 3.5 International Organisations.- 3.5.1 The IMF.- 3.5.2 The World Bank.- 3.6 References.- 4 International Interest-Rate Parity Conditions.- 4.1 Covered Interest Arbitrage, and Covered Interest Parity (CIP).- 4.2 Uncovered Interest Parity (UIP).- 4.3 Uncovered Interest Parity with Risk Premium.- 4.4 Real Interest Parity.- 4.5 Efficiency of the Foreign Exchange Market.- 4.6 Perfect Capital Mobility, Perfect Asset Substitutability, and Interest Parity Conditions.- 4.7 References.- 5 The Balance of Payments.- 5.1 Balance-of-Payments Accounting and Presentation.- 5.1.1 Introduction.- 5.1.2 Accounting Principles.- 5.1.3 Standard Components.- 5.1.3.1 Current Account.- 5.1.3.2 Capital Account.- 5.2 The Meaning of Surplus, Deficit, and Equilibrium in the Bal-ance of Payments.- 5.3 References.- 6 Real and Financial Flows in an Open Economy.- 6.1 Introduction.- 6.2 The Row Identities.- 6.3 The Column Identities.- 6.4 Derived Identities.- 6.5 Identities Are Only Identities.- II Flow Approaches.- 7 The Elasticity Approach.- 7.1 Introduction.- 7.2 Critical Elasticities and the So-Called Marshall-Lerner Condi-tion.- 7.2.1 The Balance of Payments in Domestic Currency...- 7.2.2 The Balance of Payments in Foreign Currency.- 7.2.3 Elasticity Optimism vs Pessimism.- 7.3 Foreign Exchange Market Equilibrium and Stability.- 7.3.1 Derivation of the Demand and Supply Schedules; Multiple Equilibria and Stability.- 7.4 Interrelations between the Spot and Forward Exchange Rate.- 7.4.1 The Various Excess Demand Schedules.- 7.4.2 Forward Market Equilibrium and the Spot Rate.- 7.4.3 The Monetary Authorities' Intervention.- 7.5 References.- 8 The Multiplier Approach.- 8.1 The Basic Model.- 8.2 Balance-of-Payments Adjustment in the Case of an Exogenous Increase in Exports.- 8.3 Balance-of-Payments Adjustment in the Case of an Exogenous Increase in Imports.- 8.4 Intermediate Goods and the Multiplier.- 8.5 The Empirical Relevance of the Multiplier.- 8.6 The Transfer Problem.- 8.6.1 The Classical Theory.- 8.6.2 The Multiplier Theory.- 8.6.3 Observations and Qualifications.- 8.7 References.- 9 An Integrated Approach.- 9.1 Interaction between Exchange Rate and Income in the Adjustment Process.- 9.1.1 A Graphic Representation.- 9.1.2 Stability.- 9.1.3 Comparative Statics and the Transfer Problem.- 9.2 The J-Curve.- 9.3 The S-Curve.- 9.4 The Alleged Insulating Power of Flexible Exchange Rates, and the International Propagation of Disturbances.- 9.5 References.- 10 The Mundell-Fleming Model.- 10.1 Introductory Remarks.- 10.2 Fixed Exchange Rates.- 10.2.1 Graphic Representation of the Equilibrium Conditions.- 10.2.2 Simultaneous Real, Monetary and External Equilibrium. Stability.- 10.2.2.1 Observations and Qualifications.- 10.2.3 Comparative Statics.- 10.2.3.1 The Transfer Problem.- 10.2.3.2 Exchange-Rate Devaluation.- 10.3 Flexible Exchange Rates.- 10.4 References.- 11 Policy Implications of the Mundell-Fleming Model, and the Assignment Problem.- 11.1 Introduction.- 11.2 Internal and External Balance, and the Assignment Problem.- 11.2.1 The Assignment Problem.- 11.2.2 Observations and Qualifications.- 11.3 Flexible Exchange Rates.- 11.4 Perfect Capital Mobility.- 11.5 References.- III Stock and Stock-Flow Approaches.- 12 The Monetary Approach to the Balance of Payments and Related Approaches.- 12.1 Introduction.- 12.2 The Classical (Humean) Price-Specie-Flow Mechanism.- 12.3 The Monetary Approach to the Balance of Payments.- 12.3.1 The Basic Propositions and Implications.- 12.3.2 A Simple Model.- 12.3.3 Does a Devaluation Help?.- 12.3.4 Concluding Remarks.- 12.4 The New Cambridge School of Economic Policy.- 12.5 References.- 13 Portfolio and Macroeconomic Equilibrium in an Open Economy.- 13.1 Introduction.- 13.2 Asset Stock Adjustment in a Partial Equilibrium Framework.- 13.3 Portfolio and Macroeconomic Equilibrium under Fixed Exchange Rates.- 13.3.1 Introductory Remarks.- 13.3.2 A Simple Model.- 13.3.3 Momentary and Long-Run Equilibrium.- 13.4 Portfolio and Macroeconomic Equilibrium under Flexible Exchange Rates.- 13.4.1 Introductory Remarks.- 13.4.2 The Basic Model.- 13.4.3 Static Expectations.- 13.4.4 Rational Expectations and Overshooting.- 13.5 References.- 14 Growth in an Open Economy.- 14.1 Export-Led Growth.- 14.1.1 The Lamfalussy Model.- 14.1.2 The Beckerman Model.- 14.2 Growth and the Balance of Payments.- 14.3 Growth-Oriented Adjustment Programs.- 14.4 References.- IV The Exchange Rate.- 15 Exchange-Rate Determination.- 15.1 The Purchasing-Power-Parity Theory.- 15.1.1 The Harrod-Balassa-Samuelson Model.- 15.2 The Traditional Flow Approach.- 15.3 The Modern Approach: Money and Assets in Exchange-Rate Determination.- 15.3.1 The Monetary Approach.- 15.3.2 Sticky Prices, Rational Expectations, and Overshoot-ing of the Exchange-Rate.- 15.3.3 The Portfolio Approach.- 15.3.3.1 Interaction Between Current and Capital Ac-counts.- 15.4 The Exchange Rate in Macroeconometric Models.- 15.5 Exchange-Rate Determination: Empirical Studies.- 15.5.1 Introduction.- 15.5.2 The Reactions to Meese and Rogoff, and the Way Out.- 15.5.3 An Economy-Wide Model Beats the Random Walk.- 15.5.4 The Exchange Rate in Experimental Economics.- 15.6 Equilibrium Exchange Rates: BEERs, DEERS, FEERs and All That.- 15.7 References.- 16 Capital Movements, Speculation, and Currency Crises.- 16.1 Long-Term Capital Movements.- 16.2 Short-Term Capital Movements and Foreign Exchange Speculation.- 16.2.1 Flexible Exchange Rates and Speculation.- 16.3 Speculative Attacks, Currency Crises, and Contagion.- 16.3.1 A First Generation Model.- 16.3.2 A Second Generation Model.- 16.3.3 Third Generation Models.- 16.3.3.1 A Third Generation Model.- 16.3.3.1.1 The Crisis.- 16.3.3.1.2 The Stabilization Dilemma.- 16.3.4 The Indicators Approach. Can Crises Be Forecast?.- 16.3.5 Contagion.- 16.4 References.- 17 Fixed Vs Flexible Exchange Rates.- 17.1 The Traditional Arguments.- 17.2 The Modern View.- 17.2.1 Money Demand Shock.- 17.2.2 Aggregate Demand Shock.- 17.2.3 Aggregate Supply Shock.- 17.2.4 Conclusion.- 17.3 The Experience of the Managed Float.- 17.3.1 Introduction.- 17.3.2 New Light on an Old Debate?.- 17.4 The Vicious Circle Depreciation-Inflation.- 17.4.1 Introductory Remarks.- 17.4.2 The Depreciation-Inflation Circle.- 17.4.3 Is the Circle Really Vicious?.- 17.5 References.- V The Intertemporal Approach.- 18 The Intertemporal Approach to the Balance of Payments, and the Real Exchange Rate.- 18.1 Introduction: The Absorption Approach.- 18.2 Intertemporal Decisions, the Current Account, and Capital Flows.- 18.2.1 The Feldstein-Horioka Puzzle.- 18.2.2 The Harberger-Laursen-Metzler Effect Again.- 18.3 Intertemporal Approaches to the Real Exchange Rate.- 18.3.1 Introduction.- 18.3.2 The RAIOM Approach.- 18.3.3 The NATREX Approach: An Overview.- 18.3.4 A More Technical Presentation.- 18.3.4.1 Solution of the Model.- 18.3.4.1.1 The Medium Run.- 18.3.4.1.2 The Long Run.- 18.4 References.- 19 Recent Advances.- 19.1 Introduction.- 19.2 An Intertemporal Model with Endogenous Growth in an Open Economy.- 19.2.1 The Net Borrower Economy.- 19.3 Nominal Rigidities.- 19.3.1 Extensions.- 19.4 References.- VI International Monetary Integration.- 20 International Monetary Integration: Optimum Currency Areas and Monetary Unions.- 20.1 Introduction.- 20.2 The Theory of Optimum Currency Areas.- 20.2.1 The Traditional Approach.- 20.2.2 The Cost-Benefit Approach.- 20.2.3 The New Theory.- 20.2.4 Optimum for Whom?.- 20.3 The Common Monetary Unit and the Basket Currency.- 20.4 The Common Monetary Policy Prerequisite, the Inconsistent Triad, and Fiscal Policy.- 20.4.1 Fiscal Policy Coordination.- 20.5 The Single-Currency Problem.- 20.6 References.- 21 The European Monetary Union.- 21.1 The European Monetary System.- 21.1.1 The EMS and the Theory of Optimum Currency Areas.- 21.2 The Maastricht Treaty and the Gradual Approach to EMU.- 21.3 The Institutional Aspects.- 21.4 The Maastricht Criteria.- 21.5 The New Theory of Optimum Currency Areas and EMU...- 21.6 The Euro and the Dollar.- 21.7 References.- VII Problems of the International Monetary (Non) System.- 22 Key Events in the Postwar International Monetary System.- 22.1 Introductory Remarks.- 22.2 Convertibility.- 22.3 Eurodollars.- 22.4 Special Drawing Rights.- 22.5 Collapse of Bretton Woods.- 22.6 Petrodollars.- 22.7 Demonetization of Gold.- 22.8 EMS and EMU.- 22.9 The International Debt Crisis.- 22.10The Asian Crisis.- 22.11 References.- 23 International Liquidity, the Demand for International Reserves, and Xeno-Markets.- 23.1 Introductory Remarks.- 23.2 The Descriptive Approach.- 23.3 The Optimizing Approach.- 23.4 Is International Liquidity Still A Problem?.- 23.5 The Composition of International Reserves.- 23.6 The Analysis of Euro-Markets.- 23.6.1 The Fixed-Multiplier Approach.- 23.6.2 The Portfolio Approach to Euro-Markets.- 23.7 An Evaluation of the Costs and Benefits of Xeno-Markets.- 23.8 References.- 24 Current Problems.- 24.1 Introduction.- 24.2 International Policy Coordination.- 24.2.1 Policy Optimization, Game Theory, and International Coordination.- 24.2.2 The Problem of the Reference Model and the Obstacles to Coordination.- 24.3 The Debt Problem.- 24.4 The Asian Crisis.- 24.5 Proposals for the International Management of Exchange Rates.- 24.5.1 Introduction.- 24.5.2 McKinnon's Global Monetary Objective.- 24.5.3 John Williamson's Target Zones.- 24.5.4 The Tobin Tax.- 24.6 References.- VIII Appendices.- A Appendix to Chapter.- A.1 N-Point Arbitrage.- A.2 References.- B Appendix to Chapter 4.- B.1 Rational Expectations and Efficiency of the Foreign Exchange Market.- B.2 The Peso Problem.- B.3 The Siegel Paradox.- B.4 References.- C Appendix to Chapter 7.- C.1 The Critical Elasticities Condition.- C.1.1 The Simple Case.- C.1.2 The General Case.- C.1.3 Effects on the Terms of Trade.- C.2 The Stability of the Foreign Exchange Market.- C.3 A Model for the Simultaneous Determination of the Spot and Forward Exchange Rate.- C.4 References.- D Appendix to Chapter 8.- D.1 The Multiplier without Foreign Repercussions.- D.1.1 Basic Results.- D.1.2 The Balance of Payments.- D.2 Foreign Repercussions in a n-Country Model.- D.2.1 The General Model.- D.2.2 Stability Analysis.- D.2.3 Comparative Statics. A Comparison between the Various Multipliers.- D.2.4 The Balance of Payments.- D.3 Intermediate Goods and the Multiplier.- D.3.1 Different Requirements of Intermediate Goods.- D.3.2 Identical Requirements of Intermediate Goods.- D.4 The Transfer Problem.- D.5 References.- E Appendix to Chapter 9.- E.1 A Simplified Version of the Laursen and Metzler Model.- E.1.1 The BB and RI? Schedules.- E.1.2 The Dynamics of the System.- E.1.3 Comparative Statics: The Transfer Problem.- E.2 The J-curve.- E.3 The Original Two-Country Version of the Laursen and Metzler Model.- E.3.1 The Basic Model.- E.3.2 Stability.- E.3.3 Comparative Statics.- E.3.3.1 The International Propagation of Disturbances.- E.3.3.2 The Transfer Problem.- E.4 References.- F Appendix to Chapter 10.- F.1 The Mundell Fleming Model under Fixed Exchange Rates.- F.1.1 The Slopes of the Various Schedules.- F.1.2 The Study of Dynamic Stability.- F.1.3 Comparative Statics.- F.1.3.1 The Transfer Problem.- F.1.3.2 An Exchange-Rate Devaluation.- F.2 The Mundell-Fleming Model under Flexible Exchange Rates.- F.3 References.- G Appendix to Chapter 11.- G.1 Monetary and Fiscal Policy Under Fixed Exchange Rates.- G.1.1 The Static Model.- G.1.2 The Assignment Problem.- G.1.3 A Generalization of the Assignment Problem.- G.2 Monetary and Fiscal Policy Under Flexible Exchange Rates.- G.3 Perfect Capital Mobility.- G.4 References.- H Appendix to Chapter 12.- H.1 The Classical Theory.- H.2 The Monetary Approach to the Balance of Payments.- H.2.1 The Effects of a Devaluation.- H.3 References.- I Appendix to Chapter 13.- I.1 Partial-Equilibrium Asset Adjustment.- I.2 Portfolio and Macroeconomic Equilibrium under Fixed Ex-change Rates.- I.2.1 The Dynamics of the Long-Run Equilibrium.- I.2.2 The Stability Conditions.- I.3 Portfolio and Macroeconomic Equilibrium under Flexible Exchange Rates.- I.3.1 The Basic Model.- I.3.2 Static Expectations.- I.3.2.1 Short-Run Equilibrium.- I.3.2.2 Long-Run Equilibrium.- I.3.3 Rational Expectations.- I.4 References.- J Appendix to Chapter 14.- J.1 Exports, Growth, and the Balance of Payments.- J.2 Growth-Oriented Adjustment Programs.- J.2.1 The Monetary Model.- J.2.2 The Real Growth Model.- J.2.3 The Integrated Model.- J.3 References.- K Appendix to Chapter 15.- K.1 PPP and the Harrod-Balassa-Samuelson Effect.- K.2 The Dornbusch Overshooting Model.- K.3 The Modern Approach to Exchange-Rate Determination.- K.3.1 The Monetary Approach.- K.3.2 The Portfolio Approach.- K.3.3 Empirical Studies.- K.3.4 Currency Substitution.- K.4 Chaos Theory and the Exchange Rate.- K.5 References.- L Appendix to Chapter 16.- L.1 A First-Generation Model.- L.2 A Second-Generation Model.- L.3 References.- M Appendix to Chapter 17.- M.1 The Shock-Insulating Properties of Fixed and Flexible Exchange Rates.- M.2 The Effects of Various Shocks.- M.2.1 Money Demand Shock.- M.2.2 Aggregate Demand Shock.- M.2.3 Aggregate Supply Shock.- M.2.4 Conclusion.- M.3 The Intertemporal Approach.- M.4 References.- N Appendix to Chapter 18.- N.1 The Two-period Case.- N.2 An Infinite Horizon Model.- N.3 The RAIOM Approach to the Real Exchange Rate.- N.4 The NATREX Approach.- N.4.1 The SOFC Rule and the Investment Function.- N.4.1.1 The Optimal Feedback Control Rule.- N.4.1.2 The Sub-Optimal Feedback Control (SOFC) Rule.- N.4.2 Analysis of the NATREX Equilibrium.- N.4.2.1 The Medium Run.- N.4.2.2 The Long Run.- N.5 References.- O Appendix to Chapter 19.- O.1 The Dynamic Optimization Problem.- O.2 The Net Borrower Nation.- O.2.1 Steady-State Stability and Comparative Dynamics..- O.3 Nominal Rigidities.- O.3.1 The Consumption-Based Price Index.- O.3.2 The Composite Nontraded Good, and Its Demand Function.- O.3.3 The Intertemporal Optimization Problem.- O.3.3.1 Steady-State Equilibrium.- O.3.3.2 Short-run Effects of an Unanticipated Money Shock.- O.4 References.- P Appendix to Chapter 20.- P.1 Fiscal Policy in a Monetary Union.- P.2 Fiscal Coordination.- P.3 References.- Q Appendix to Chapter 23.- Q.1 The Maximization of a Welfare Function.- Q.2 Intertemporal Maximization and the Normative Theory of Eco-nomic Policy.- Q.3 The Composition of International Reserves.- Q.4 A Portfolio Model of the Euro-Market.- Q.5 References.- R Appendix to Chapter 24.- R.1 International Policy Coordination.- R.2 Target Zones.- R.3 The Tobin Tax.- R.3.1 A Simple Model.- R.4 References.ReviewsAuthor InformationTab Content 6Author Website:Countries AvailableAll regions |