PolicyandCoordination国际金融香港大学,WONG

MacroeconomicPolicyandCoordinationUnderFloatingExchangeRatesWONGKaFu19March2001Goldstandard1870-1914Centralbankspegthepricesoftheircurrenciesintermsofgold,andholdgoldasofficialinternationalreserves.Exchangeratesamongcountriesarefixedduetoarbitrage.GoldCountry1Country2Country3AdvantageofgoldstandardLimittheextenttowhichthecentralbankscancauseincreaseinnationalpricelevelsthroughexpansionarymonetarypolicies.Theselimitsmaketherealnationalmoniesmorestableandpredictable,therebyenhancingthetransactioneconomiesarisingfromtheuseofmoney.DisadvantageofgoldstandardConstraintstheuseofmonetarypolicytofightunemploymentTyingcurrencyvaluestogoldensuresastableoverallpricelevelonlyiftherelativepriceofgoldandothergoodsandservicesisstable.HistoricalBackgroundGreatDepressionin1930sunemploymentdeflationbankfailureLackofconfidenceinpapermoneyDemandforgoldincreasedbutnationaltreasuriescouldnotsupplyGoldstandardcollapsedUnitedKingdomandsomecountriesforcedtoabandonthegoldstandardTheamountandfrequencyofmonetarytransactionsbetweennationscontractedbecauseTheuncertaintyaboutthevalueofmoneythatnolongerboreafixedrelationtogoldNationshoardedgoldandmoneythatcouldbeconvertedintogoldRevertedtobarterexchange.CompetitivedevaluationOthergovernments,desperatetofindforeignbuyersfordomesticagriculturalproducts,madetheseproductsappearcheaperbysellingtheirnationalmoneybelowitsrealvaluesoastoundercutthetradeofothernationssellingthesameproducts.TradingrivalsretaliatesthroughsimilardevaluationGoldstandardcollapsed:ResultBetween1929and1932pricesofgoodsfellby48percentworldwide,andthevalueofinternationaltradefellby63percent.LessonConvertibilityofcurrenciesfromonetotheotherisanimportantelementforinternationaltradeandeconomicdevelopmentAproposalby HarryDexterWhiteintheUS

JohnMaynardKeynesintheUKNeedtoestablishamonetarysystemandaninternationalinstitutiontomonitorthemonetarysystemThesystemaimsatencouragingtheunrestrictedconversionofonecurrencyintoanother,establishingaclearandunequivocalvalueforeachcurrency,andeliminatingrestrictionsandpractices,suchascompetitivedevaluationThebirthofIMFJuly1–22,1944BrettonWoods,NewHampshire,U.S.A.Thedelegatesof44nationsnegotiatedforestablishingtheInternationalMonetaryFundDecember27,1945ArticlesofAgreemententerintoforceuponsignatureby29governmentsMay6,1946BeganoperationwhentwelveExecutiveDirectorsfiveappointedandsevenelectedholdinauguralmeetinginWashington.Gold-exchangestandardor

BrettonWoodsSystemAdoptedin1944.Thevalueofeachcurrencywasexpressedintermsofgold(parvalue),andmemberswereobligedtokeeptheexchangeratesfortheircurrencieswithin1percentofparity.TwomajorelementsConvertibilityoftheUSdollartogold:TheUnitedStatesdefinedthevalueofitsdollarintermsofgold,sothatoneounceofgoldwasequaltoexactly$35.TheU.S.governmentstoodbehindthisdefinitionandwouldexchangegoldfordollarsatthatrateondemand.ParvaluesAllothermembershadtodefinetheexchangevalueoftheirmoneyintermsofgoldorintermsoftheU.S.dollar(oftheweightandfinenessineffectonJuly1,1944).Memberskeptthevalueoftheirmoneywithin1percentofthisparvalueanycontemplatedchangeshouldbefirstdiscussedwithothermembersintheforumoftheIMFandobtainedtheirconsentbeforeimplementingthenewparvalue.Country1Country2Country3GoldReservecurrencyBetweentheendofWorldWarIIand1973,theU.S.dollarwasthemainreservecurrencyandalmosteverycountrypeggedtheircurrencytotheU.S.dollar.Exchangeratesamongcountriesarefixedduetoarbitrage.Theasymmetricpositionofthereservecenter(3countries)AssumethreecountriesandthreecurrenciesintheworldCountry1isthereservecenterifbothcountry2andcountry3pegtheircurrenciestocountry1’s.Country1isalsopegto2&3,butonlypassively.I.e.,countries2and3havetointervenetheforeignexchangemarkettokeeptheirratefixedtocountry1’s.Country1Country2Country3TheasymmetricpositionofthereservecenterBut,country1needdonointerventionintheforexmarketandisfreetosetitsmonetarypolicy.Ifcountry1expandsitsmoneysupplyCountry1’sinterestratefalls.Tomaintainthefixedrate,bothcountries2and3havetobuyreserveassetswiththeirowncurrencies,expandingtheirmoneysuppliespushingtheirinterestratedowntothelevelestablishedbythereservecenter.Outputthroughouttheworld(allthecountries)wouldexpand.Theasymmetricpositionofthereservecenter(Ncountries)AssumeNcountriesandNcurrenciesintheworldCountry1isthereservecenterifallotherN-1countriespegtheircurrenciestocountry1’s.I.e.,allN-1countrieshavetointervenetheforeignexchangemarkettokeeptheirratefixedtocountry1’s.Ifcountry1expandsitsmoneysupplyCountry1’sinterestratefalls.Tomaintainthefixedrate,allotherN-1countrieshavetobuyreserveassetswiththeirowncurrencies,expandingtheirmoneysuppliespushingtheirinterestratedowntothelevelestablishedbythereservecenter.Outputthroughouttheworld(allthecountries)wouldexpand.TheasymmetricpositionofthereservecenterAllothercountrieshavetopassivelyimportthemonetarypolicyofthereservecenterbecauseoftheircommitmenttopegtheircurrenciestothereservecurrency.Country1canindependentlychooseitsmonetarypolicy.ThecollapseofBrettonWoodsLate1960sbalanceofpaymentsdisequilibriaformanycountries,includingtheUSaseriesofcurrencycrisesAugust15,1971UnitedStatesinformsIMFitwillnolongerfreelybuyandsellgoldtosettleinternationaltransactions.Parvaluesandconvertibilityofthedollar—twomainfeaturesofBrettonWoodssystem—ceasetoexist.PostBrettonWoodseachmemberchoosesitsownmethodofdeterminingtheexchangevalueofitsmoneythemembernolongerbasethevalueofitscurrencyongoldandeachmembershouldinformothermembersaboutpreciselyhowitdeterminesthecurrency'svalue,I.e.,the“fixed”exchangerate.Exchangeratearrangementsfloatfreely:theirmoneyisworthwhateverthemarketsarepreparedtopayforthem.dirtyfloatormanagedfloat:managethefloatbybuyingandsellingtheirowncurrenciestoinfluencethemarketPeg:pegthevalueoftheirmoneytothatofamajorcurrencyorgroupofcurrenciesSnake:Withinthegroup,thevalueofthecurrenciesarenotallowedtofluctuateoutsidearangeagainsteachotherFloatingexchangeratesSince1973:Theexchangeratesoftheindustrializedcountrieshaveadoptedfloatingexchangerates.Bymid-1980s:economistsandpolicymakershadbecomemoreskepticalaboutthebenefitsofaninternationalmonetarysystembasedonfloatingrates.ThecaseforandagainstfloatingexchangeratesForMonetarypolicyautonomySymmetryExchangeratesasautomaticstabilizersAgainstDisciplineproblemDestabilizingspeculationandmoneymarketdisturbancesInjurytointernationaltradeandinvestmentUncoordinatedeconomicpoliciesTheillusionofgreaterautonomyFor:monetarypolicyautonomyUnderfixedexchangeratesystem,countriesotherthanthereservecentercannothavemonetarypolicy:Havetoadjustmoneysupply(andhencetheinterestrate)tomaintaintheexchangerateatafixedleveliftheyhavenorestrictiononcapitalflow.Hencenocontroloninflation.HavetoimposerestrictiononinternationalpaymentsifwewantsomeautonomyinmonetarypolicydistortinginternationaltradeFor:symmetryUnderfixedexchangerate,theU.S.playedaleadingroleindeterminingtheworldmoneysupply.AllcountriesexcepttheU.S.havetheoptionofdevaluingitscurrencyagainsttheU.S.dollars.ThedollarwasatlastdevaluedinDecember1971,buthadgonethroughalongandeconomicallydisruptiveperiodofmultilateralnegotiation.For:ExchangeratesasautomaticstabilizersAtemporaryfallinexportdemandWhatifthereisapermanentfallinexportdemand?DD1AA1E1Y1Output,YExchangeRate,EInitialequilibrium:fixedorfloating?DD2DD1AA1E1Y1Output,YExchangeRate,EAtemporaryfallinexportdemandDD2DD1AA1E1E2Y2Y1Output,YExchangeRate,EEffectofatemporaryfallinexportdemandunderafloatingexchangerateDD2DD1AA1AA2E1Y3Y1Output,YExchangeRate,EEffectofatemporaryfallinexportdemandunderafixedexchangerateDD2DD1AA1AA2E1E2Y3Y2Y1Output,YExchangeRate,EEffectofatemporaryfallinexportdemand:AcomparisonoffloatingandfixedAgainst:DisciplineGovernmentmightembarkonover-expansionaryfiscalormonetarypolicy,fallingintotheinflationbiastrapbecausenoneedtoworryaboutlossesofforeignreserves.Against:DestabilizingspeculationandmoneymarketdisturbancesAnythingthatfluctuates,includingfloatingexchangerate,canbespeculated.Speculationmayleadtoinstabilityinforeignexchangemarketsandhencenegativeeffectoncountries’internalandexternalbalances.Disturbances(temporary)tothehomemoneymarketcouldbemoredisruptiveunderfloatingthanunderafixedrate.DD1AA1E1Y1Output,YExchangeRate,EInitialequilibriumDD1AA1AA2E1E2Y2Y1Output,YExchangeRate,EEffectofatemporaryriseinmoneydemand:floatingDD1AA1AA2E1Y1Output,YExchangeRate,EEffectofatemporaryriseinmoneydemand:fixedDD1AA1AA2E1E2Y2Y1Output,YExchangeRate,EEffectofatemporaryriseinmoneydemand:AcomparisonoffloatingandfixedAgainst:DestabilizingspeculationandmoneymarketdisturbancesWhatistheeffectofapermanentshiftofmoneydemandunderbothfixedandfloatingexchangerates?Against:InjurytointernationaltradeandinvestmentFluctuatingexchangeratesimpliesmoreuncertainreturnsoninvestmentandpricesofgoodstradedinternationally.Theoretically,exchangerateriskmaybeavoidedthroughatransactionsintheforwardexchangemarket.Maybecostlytouse.Against:uncoordinatedeconomicpoliciesUncoordinatedeconomicpoliciesmayresultincompetitivemacroeconomicpolicieswhichhurtallcountriesand,intheend,helpnoneI.e.,prisoners’dilemma.Against:illusionofgreaterautonomyPolicymakersmayhavetoconsidertheeffectofmonetarypoliciesonexchangeratealso.Floatingratesmayleadtoaquickeradjustmentofpricelevelsandhencereducestheeffectofmonetarypolicyonrealeconomicvariables.MonetarypolicyExchangerateForeigncountriesDomesticeconomyFloatingorfixed?ExchangeRateExperienceBetweentheOilShock

1973-1980TheFirstOilShockandItsEffects,1973-1975BackgroundMarch1973:theindustrializedcountries’exchangerateisallowedtofloatFall1972:CommitteeofTwentytodesignanewfixedratesystemfreeofasymmetryJuly1974:“OutlineofReform”Energypricesandthe1974-75recessionThewarbetweenIsraelandArabcountriesBeforeOctober1973:$3perbarrelOctober1973:warbetweenIsraelandtheArabcountrieswasbrokenIsraelwassupportedbytheU.S.andtheNetherlandsToprotestagainstthissupport,ArabmembersofOPEC(OrganizationofPetroleumExportingCountries)imposedanembargoonoilshipmentstothesetwocountries.EffectofthewaronoilpricesBuyersstockupinventoriesOPECraisedpricesMarch1974:$12perbarrelI.e.oilshockEffectoftheoilshockTheoilshockraisedtheenergypricespaidbyconsumersandtheoperatingcostsofenergy-usingfirmsandalsofedintothepricesofnon-energypetroleumproducts,suchasplastics.EffectoftheoilshockLikealargetaxonoilimportersimposedbytheoilproducersofOPECandalsolikeanincreaseinconsumerandbusinesstaxesConsumptionandinvestmentsloweddowneverywhereTheworldwasthrownintorecessionEffectoncurrentaccountCAofnon-oilexportingcountriesworsenedCAofoilexportersimproved (Table22-2)CurrentAccountBalances,1973-1997(billionsofdollars),(KO,Table22-2)EffectoninflationOilshockraisedpricesofpetroleumproductsandthecostsofenergy-usingindustriescausedpriceleveltojumpupwardInflationexpectationdroveupcontractwages(despitealreadyhighunemploymentrate)speculatorsbuiltupstocksofthosecommoditieswhosepricesareexpectedtoriseOtherfactorscausinginflation1972on:poorharvestintheU.S.andtheSovietUnionshortageofsugarandcocoadisappearanceofthePeruviananchoviesfromtheircustomaryfeedinggroundsMonetarypoliciesAfter1973:ThemovetofloatingrateallowsmonetarypolicyautonomyIndustrializedcountriesadoptedamorerestrictivemonetaryandfiscalpoliciesaimedatrestrainingtheacceleratinginflationdeepenedtherecessionMonetarygrowthStagflation:1974-75OutputstagnatedinflationremainedhighRegainingInternalandExternalBalanceAsrecessiondeepenedover1974andearly1975,mostgovernments(inparticular,theindustrialized)shiftedtoexpansionaryfiscalandmonetarypolicies.Secondhalfof1975:strongoutputrecovery.CAbecamesurplusIsfloatinggood?Yes!FloatingallowsautonomyinmonetarypolicyandhelptoregaininternalandexternalbalanceNon-oil-developingcountriesDidnot(andcannot)cuttheirspendingassharplyasindustrialcountriesGDPgrowthdidnotbecomenegativein1975DevelopingcountriesfinancedtheiroildeficitsinpartbyborrowingfundsthattheOPECcountrieshaddepositedintheindustrialcountries’financialcenters.RevisingIMF’sCharterJanuary,1976:revisedthefourthIMFArticleofAgreement,whichcoveredexchangerateagreementimplicitlyendorsefloatingratesbyfreeingeachmembercountrytochooseanyexchangeratesystemitpreferred.WeakU.S.Dollar1976-19791975:recoveryduetoexpansionarymonetaryandfiscalpolicyunemploymentrate=8.3%1976:recoverysloweddownandunemploymentremainedhigh1978:unemploymentrate=6.0%re-ignitedinflationU.S.currentaccountdeficitDepreciationofU.S.dollarGermanyandJapanfrom1975-1978fearedofinflationandwouldnotuseveryexpansionarypolicies.LowinflationraterelativetotheU.S.HencedepreciationofU.S.dollar(PPP?) (Figure19-3)NominalandRealEffectiveDollarExchangeRateIndexes1975-1998DepreciationofU.S.dollarJuly1978,BonneconomicsummitWestGermanyandJapanjoinedtheU.S.touserelativelyexpansionarypolicies.PaulVolckerfactor:1979InternationalinvestorslostconfidenceinU.S.dollarinviewofthewideninggapbetweenU.S.andforeigninflationrates.WeakeningdollarfueledU.S.inflationratebyraisingimportpricesTorestoreconfidence,CarterappointedPaulA.VolckerTheVolckerfactorOctober1979,VolckerannouncedatighteningofU.S.monetarypolicyandtheadoptionbytheFedofmorestringentproceduresforcontrollingmoneysupplygrowthDoesfloatinggiveusautonomyinmonetarypolicyNotreally.Governmentscouldnotbeindifferenttothebehaviorofexchangerates.surrenderedsomeoftheirpolicyautonomyinotherareastopreventexchangeratemovementstheyviewedasharmfultotheireconomiesMonetarypolicyExchangerateForeigncountriesDomesticeconomyThesecondoilshock1979:ShahofIranfelldisruptoilexportsfromIranoilpricesrose1980:$32perbarrel($13perbarrelin1978)HistoryrepeatedhighinflationrateslowgrowthCentralBanksdidnotrepeatCBsworriedthatthe1978-80upswingininflationmightbehardtoreverselaterifitwereallowedtobebuiltintoinflationaryexpectationsandthewage-settingprocessConsequently,userestrictivemacroeconomicpolicieshencesmalloutputrecoverydeepestrecessionsince1930sMacroeconomicInterdependenceunderafloatingrateCurrentaccountsPreviouschaptersCA=CA(qH/F,Y-T)qH/F

=(EH/F

PF)/PH

Theunitsofhomegoodbasketperforeigngoodbasket.CA/qH/F>0CA/Yd<0CurrentaccountsNow,includeforeigndisposableincomeCA=CA(qH/F,YH-TH,YF-TF)qH/F

=(EH/F

PF)/PH

Theunitsofhomegoodbasketperforeigngoodbasket.CA/qH/F>0CA/YHd<0CA/YFd>0GoodsmarketequilibriumYH=C(YH-TH)+IH+GH+ CA(qH/F,YH-TH,YF-TF)CAF=-CAH(qH/F,YH-TH,YF-TF)qH/F

NotethatqH/F

=(EH/F

PF)/PH

Theunitsofhomegoodbasketperforeigngoodbasket.YF=CF(YF-TF)+IF+GF- CAH(qH/F,YH-TH,YF-TF)qH/F

HHcurveHHcurve:arelationofHomeandForeignoutputlevelsatwhichaggregatedemandequalsaggregatesupplyinhome.FixedYF-TF,findYHsuchthatYH =C(YH-TH)+IH+GH+CA(qH/F,YH-TH,YF-TF) =ADH(qH/F,YH-TH,YF-TF)HigherYFmeanshigherADFandhencehigherYH

HenceupwardslopingHHcurveEffectofanincreaseinYFonshort-runhomeoutputequilibriumOutput(realincome),YAggregatedemand,DD=YADH(qH/F,YH-TH,YF2-TF)YF2>YF1Y1Y2ADH(qH/F,YH-TH,YF1-TF)HHHomeoutput,YHForeignoutput,YF45oline1unitchangeinforeignoutputwillcauselessthan1unitchangeinhomeoutput.FactorsthatshiftsHHAnythingthatchangesaggregatedemandGH,TH,IH,GF,TF,IF,EandanythingthataffectsE.EffectofanincreaseinYFonshort-runhomeoutputequilibriumOutput(realincome),YAggregatedemand,DD=YADH(qH/F,YH-TH,YF1-TF;GH2)GH2>GH1Y1Y2ADH(qH/F,YH-TH,YF1-TF;GH1)HHHomeoutput,YHForeignoutput,YFAnincreaseinGHFFcurveFFcurve:arelationofHomeandForeignoutputlevelsatwhichaggregatedemandequalsaggregatesupplyinForeign.FixedYH-TH,findYFsuchthatYF=CF(YF-TF)+IF+GF- CAH(qH/F,YH-TH,YF-TF)qH/FHigherYHmeanshigherADHandhencehigherYF

HenceupwardslopingFFcurveHHHomeoutput,YHForeignoutput,YFFFOutputdeterminationinatwocountryworldDisinflation,Slump,andRecovery,1980-1995Disinflationandthe1981-1983recessionOctober1979:FederalReserveChairmanVolckerannouncedanabruptchangeinU.S.monetarypolicyaimedatfightingdomesticinflationandstemmingthedollar’sfallVolcker’smonetaryslowdownconvincedthemarketNovember1980election,Reagancampaignedananti-inflationplatformUSshort-terminterestratenearlydoubledtheir1978levelU.S.FederalFundsRateSource:FRBSt.Louis,FREDdatabase.ThedollaragainstDMappreciated23.2%betweentheendof1979andtheendof1981Source:merce.ubc.ca/EffectofanappreciationHomegoodsmoreexpensiverelativetoForeigngoodsHence,demandshiftsfromhomegoodstoforeigngoodsHHHomeoutput,YHForeignoutput,YFFFHomeoutputfallsForeignoutputrisesEffectofadecreaseinEWereallothercountrieshappyaboutU.S.dollarappreciation?Notnecessarily!Strongerdollarhinderedforeigncountriesintheirownfightsagainstinflation,bothbyraisingtheimportpricestheyfacedandbyencouraginghigherwagedemandsbytheirworkersOtherCBsrespondedbyinterveninginFXmarkettoslowthedollar’sriseandtheirinterestratesweredrivenupwardWorld-widerecessionSynchronizedmonetarycontractionallovertheworldthrewtheworldeconomyintoadeeprecession,themostseveresincetheGreatDepressionofthe1930sUnemploymentRatesinMajorIndustrializedCountries,1979-1994(percentoflaborforce)Source:Table19-2ofKrugmanandObstfeldInflationRatesinMajorIndustrializedCountries,1981-1994and1961-71Average(percentperyear)Source:Table19-3ofKrugmanandObstfeldFiscalPolicies,theCurrentAccount,andtheResurgenceofProtectionism1981:underReagan,congressapprovedlegislationloweringpersonaltaxesprovidingincentivestobusinessesaccelerationindefensespending,accompaniedbycutsingovernmentspendingondomesticprogramI.e.,abudgetdeficitandafiscalstimulustotheeconomyEffectofhomefiscalexpansionhomecurrencyappreciatesForeignproductsbecomerelativelycheapandworlddemandforthemrisesashiftofFFupHomeaggregatedemandincreasesashiftofHHrightHHHomeoutput,YHForeignoutput,YFFFHomeoutputrisesForeignoutputrisesEffectofanincreaseinhomefiscalexpansionComplicationintheU.S.analysis1981:fiscalpolicymandated1982:actualexecutionofthepolicy1983:expansionaryimpactfeltButanticipationoffuturefiscalexpansionin1981wouldsimplyhaveappreciatedthedollar.Thus,in1981,ashiftofFFbutnotHH.Henceonlyasmallerincreaseinhomeoutput.WhatdidGermanandJapando?Theywerefearofinflationandhadcontractionaryfiscalpolicies.Thus,encouragedollarappreciationDollaragainDMappreciated47.9percentfromtheendof1979toFebruary1985December1982:recessionatlowestpointandU.S.economybegantorecoverWhy1982?Becauseofexpansionaryfiscalpolicyin1982andalooserMpolicy.ProtectionismresurgedPersistentlypooreconomicperformanceinthe1980sPressuresongovernmenttoprotectindustriesintheexportingandimport-competingindustries.AsU.S.recoveryslowedlatein1984,protectionistpressuressnowballed.ThePlazaagreementSeptember22,1985:G5atNewYork’sPlazaHotelG5=U.S.Britain,France,GermanyandJapanagreedtojointlyinterveneintheforeignexchangemarkettobringadollardepreciation.September23,1985:dollardepreciatedsharplythroughearly1987U.S.maintainedaloosemonetarypolicyandhencelowinterestraterelativetotheforeigncurrencyrates.LouvreAccordFebruary22,1987:G5plusCanadapledgedtostabilizenominalexchangeratesaroundthelevelsthenprevailing.GovernmentssetuptargetzonesforexchangeratesandagreedtodefendthembyinterveningintheforeignexchangemarketOctober1987U.S.externaldeficitremainedhighaftertheLouvreAccordOctober1987:U.S.stockmarketdroppedandthencrashedfollowingAmericancriticismofaGermaninterestratehikeGreenspanhadtoprovideliquiditytoatroubledfinancialsystemU.S.dollardepreciatedalthoughothercountriesalsoloweredtheirinterestrateDoessterilizedinterventionwork?No!UnlesstheinterventionisbackedupbychangesinmonetaryorfiscalpolicyratherthanthemilderexpedientofsterilizedinterventionI.e.tradeoffbetweeninternalbalanceandexchangestability.GlobalslumponceagainU.S.:rapidmonetarygrowthin1985-1986fueledinflationin1987-1988exceptionallytightmonetarypolicyledtheeconomyintoaprolongedeconomicdownturnbythesummerof1990begintoreboundonlyin1992GlobalslumponceagainBritain:Loosemonetarypolicyin1988ledtohigherinflationby19891990:enteredEuropeanMonetarySystemexchangeratemechanismagreeingtopegthepoundsterlingFixedratewithhigherinflationmakeshomegoodmoreexpensiveEconomyrecoveredonlyafterfreeingitsexchangeratein1992GlobalslumponceagainJapan:inflationupin1989(possiblyaresultofarelativelyloosemonetarypolicyover1986-88)realestatepriceandstockmarketskyrocketed1989:tightmonetarypolicyNikkeifellmorethanhalffrom1990to1992BankingcrisisRecessionstartedinearly1992GlobalslumponceagainGermanyJuly1,1990:EastandWestGermanyreunitedagreedtoconvertEGmoneysupplytoWGmoneysupplyat1DM=1EastGermanMarkimplies26.6inGermany’sDMsupplyover1990coupledwithfiscalexpansion,inflationroseInternationalPolicyCoordinationFailuresrevisitedPrisoners’dilemma=0%U=0.5%*=-2%U*=1.75%=-1.25%U=1.5%*=-1.25%U*=1.5%=-1%U=1%*=-1%U*=1%=-2%U=1.75%*=0%U*=0.5%SomeWhatRestrictiveSomeWhatRestrictiveVeryRestrictiveVeryRestrictiveHomeForeignHypotheticaleffectofmonetarypoliciesObjectivefunctionGenerally,wedonotlikeinflationthesmaller,thebetter(-thelarger,thebetter)GenerallywedonotlikeunemploymentUthesmaller,thebetter.ObjectivefunctionF(,U)

Forexample,objectivefunctionF(,U)=-/UCheck:Fincreaseswith-,decreaseswith,foranygivenUFdecreaseswithU,foranygiven0=0%U=0.5%*=-2%U*=1.75%8/75/6=-1.25%U=1.5%*=-1.25%U*=1.5%5/61=-1%U=1%*=-1%U*=1%18/7=-2%U=1.75%*=0%U*=0.5%0SomeWhatRestrictiveSomeWhatRestrictiveVeryRestrictiveVeryRestrictiveHomeForeignSupposetheobjectivefunctionis-/UOtherobjectivefunctionsF(,U)=-(+U)Check:Fincreaseswith-,decreaseswith,foranygivenUFdecreaseswithU,foranygivenI.e.,consistentwithourdesiredpropertiesofgovernmentobjectives.AdditionalReadingsChapter19ofKrugman&Obstfeldhasahistoricalaccountofwhatwehavebeenlearnedsince1973.Frankel,JeffreyA.(1999):“NoSingleCurrencyRegimeisRightforAllCountriesoratallTimes,”EssayinInternationalFinanceNo.215,InternationalFinanceSection,DepartmentofEconomics,PrincetonUniversity,Princeton,NewJersey.Trade-WeightedExchangeValueofU.S.DollarvscurrenciesofabroadgroupofmajorU.S.tradingpartnersSource:FRBSt.Louis,FREDdatabase.Effectiveexchangerate(Tradeweighted)indicesforHKdollars(Nov1983=100)Source:HongKongMonthlyDigestofStatistics.谢谢观看/欢迎下载BYFAITHIMEANAVISIONOFGOODONECHERISHESANDTHEENTHUSIASMTHATPUSHESONETOSEEKITSFULFILLMENTREGARDLESSOFOBSTACLES.BYFAITHIBYFAITH一本万利工程1、背景驱动2、盈利策略3、选菜试菜4、价值创造5、完美呈现6、成功面试7、持续改造（一）、一本万利工程的背景驱动

1、什么是一本万利

2、餐饮时代的变迁菜单经验的指导方针运营市场定位的体现经营水平的体现体现餐厅的特色与水准沟通的工具餐厅对顾客的承诺菜单承诺的六大表现1、名字的承诺2、质量的承诺3、价格的承诺4、规格标准的承诺5、外文翻译的准确6、保证供应的承诺

1、顾客满意度餐厅价值、价格、合理感、愉快感、安心感、美味感、便利感、满足感、有价值感、喜悦感、特别感2-2、初期投资餐厅面积、保证金、设备投资、店铺装潢、器具用品投资、制服选定、