International Monetary Problems and the Foreign Exchanges

International Monetary Problems and the Foreign Exchanges

International Monetary Problems and the Foreign Exchanges

International Monetary Problems and the Foreign Exchanges

Excerpt

Balance-of-payments crises and the distortions of world trade and payments they cause are but one of the many unresolved economic problems of our time. There are others--the bitter antagonism between two powerful blocs espousing radically different principles of economic organization, or the rather unsatisfactory progress of the less developed regions of the globe--that may well be even more important. I have the impression, however, that there is no other economic issue of comparable weight for which reasonable solutions can be put into effect as easily as for the problems of international finance.

This booklet is addressed primarily to the economically sophisticated reader without special training in the area of international trade theory and policy. It may also serve as an introduction to my recent book, Flexible Exchange Rates (Chicago: University of Chicago Press, 1961) in which related topics are treated on a substantially more advanced theoretical plane. It was generally felt, I believe, that this latter publication was perhaps written in a somewhat too terse and difficult manner, given the fact that it also dealt with issues of rather topical interest to policymakers who do not always have the leisure to ponder abstract theoretical reasoning. I therefore welcome the opportunity to publish this companion volume.

The arrangement of the material may require some explanation. The opening chapter is a rather extensive introduction to some of the current problems of the real world. The systematic exposition of the theoretical groundwork begins with Chapter II. This may appear as a reversal of the logical order of treatment. The reasons for adopting it were frankly psychological: it has been my experience that many readers outside a small circle of theoretically oriented economists want to see for what purposes theoretical analysis is to be used before they are willing to invest time in it. Readers who are not so inclined may just as well start with Chapter II and read the introductory first chapter at the very end. Literature references in the text are kept to a minimum; instead, I have appended an annotated bibliography.

Many economists appear to believe that members of our profession ought never to offer clear and unambiguous policy advice. Those who are thus inclined will not, I am afraid, be likely to derive comfort from the following pages.

For help and advice, I want to thank Professors Herbert Giersch and my assistant, Mr. Rolf Bollinger.

E. S.

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