SVEN W. ARNDT
and Trade Problems
The old international monetary order and the NIEO. Fixed and floating exchange rates. International specialization and market linkages. The interdependence of national economies. Interest rates, and speculative investment. The transmission of inflation between nations. The need for flexibility.
In the postwar era, international monetary arrangements were based on fixed but adjustable exchange rates. During the same period, the thrust of international commercial relations pointed toward free trade and open competition. In the early 1970s the international monetary order collapsed as the major trading nations switched to floating exchange rates, and the system of free trade and specialization fell under the mount-