May 2009, ©2009, Wiley-Blackwell
* Presents an
analytically rigorous introduction to the field and uniquely
includes optional econometric studies
* Provides a unified macroeconomic model to examine rigorously international macroeconomics and then focuses this model on historic cases, institutions, and specific countries, dealing with various types of macroeconomic crises
* Provides a strong policy orientation by an author who worked for many years at the IMF
* Is supported by a website with extensive solutions for the problem sets, PowerPoint slides, and an update on the 08-09 meltdown
Part 1 Foundations
Chapter 1 An Overview of the Book
1.1 What Is International Macroeconomics?
1.2 The International Macroeconomics Toolkit
1.3 The Contents of this Book
Chapter 2 Open-economy Macroeconomic Accounting
2.1 The Balance of Payments Accounts
2.2 Sub-accounts in the Balance of Payments
2.3 Basic BOP Facts for the United States
2.4 The NIPA in an Open Economy: Aggregate Identities
2.5 Sectoral Identities
Chapter 3 Macroeconomic Influences on the Foreign Exchange Market
3.1 Exchange Rate Concepts
3.2 Supply and Demand for Foreign Exchange
3.3 Relative Prices of Domestic and Foreign Goods: The Real Exchange Rate
3.4 Relative Returns on Domestic and Foreign Assets: Interest Parity Conditions
3.5 Central Bank Intervention in the Foreign Exchange Market: Exchange Rate Regime
Appendix 3.1 Properties of Logarithms
Chapter 4 The Macroeconomic Framework
4.1 Production Structure and Economic Agents
4.2 Equilibrium in the Market for Financial Assets
4.3 Equilibrium in the Market for Domestic Goods
4.4 Equations and Unknowns: Imposing Additional Structure
Appendix 4.1 The Marshall–Lerner Condition
Appendix 4.2 The Framework in Log-Linear Form
Part 2 Fixed Exchange Rates
Chapter 5 The Classical Gold Standard
5.1 Evolution of the International Gold Standard
5.2 Central Bank Behavior under the Gold Standard
Chapter 6 Gold Standard Macroeconomics
6.1 Short-Run Macroeconomics under the Gold Standard
6.2 Short-Run Comparative Statics
6.3 The Long-run Model
6.4 The Gold Standard as an International Monetary System
Appendix 6.1 The Gold Standard with Zero Capital Mobility
Chapter 7 The Bretton Woods System
7.1 Evolution of the Bretton Woods System
7.2 Modeling Soft Pegs with Imperfect Capital Mobility
7.3 The Bond Market Equilibrium (BB) Curve
7.4 Properties of the BB Curve
Chapter 8 Macroeconomics under "Soft" Pegs and Imperfect Capital Mobility
8.1 Solving the Model
8.2 Comparative Statics
8.3 Bretton Woods as an International Monetary System
Appendix 8.1 Alternative Monetary Policy Regimes
Chapter 9 Fixed Exchange Rates in a Financially Integrated World: Currency Crises and "Hard" Pegs
9.1 Soft Pegs with High Capital Mobility
9.2 Currency Crises
9.3 Financial Integration and Crises
9.4 Modern Versions of Hard Pegs
9.5 Soft Versus Hard Pegs: Some Policy Issues
Appendix 9.1 The Monetary Approach to the Balance of Payments (MABP)
Part 3 Floating Exchange Rates
Chapter 10 Floating Exchange Rates I: Transitory Shocks
10.1 Analytical Framework
10.2 Solving the Floating Exchange Rate Model
10.3 Comparative Statics
Appendix 10.1 The Asset Market Approach to the Exchange Rate
Appendix 10.2 Algebraic Solution of the Log-linear Model
Appendix 10.3 Interest Rate Targeting under Floating Exchange Rates
Chapter 11 Floating Exchange Rates II: Intermediate and Permanent Shocks
11.1 Anticipated Future Shocks
11.2 Multi-period Shocks
11.3 Permanent Shocks
11.4 Comparing Permanent and Transitory Shocks
Chapter 12 Floating Exchange Rates III: Exchange Rate Dynamics
12.1 Asymmetric Adjustment in Goods and Asset Markets
12.2 The Dornbusch Overshooting Model
12.3 Comparative Statics
12.4 Generalizing the Model
Chapter 13 Long-run Equilibrium under Floating Exchange Rates
13.1 A Long-run Model
13.2 Solving the Long-run Model
13.3 Comparative Statics
13.4 Comparing the Short-run and Long-run Responses to Permanent Shocks
13.5 The Role of Long-run Inflation
Appendix 13.1 The Long-run Floating Rate Model in Log-linear Form
Appendix 13.2 Fixed Exchange Rates in the Long Run
Chapter 14 Floating Exchange Rates with Short-run Price Flexibility
14.1 A "Flexprice" Model
14.2 Real Exchange Rate Dynamics
14.3 The Monetary Approach to the Exchange Rate
14.4 Currency Crises Revisited
14.5 Gradual Price Adjustment
Chapter 15 Choosing an Exchange Rate Regime
15.1 Optimality Criterion I: Minimizing the Costs of Making International Transactions
15.2 Optimality Criterion II: Long-run Inflation Stabilization
15.3 Optimality Criterion III: Short-run Macroeconomic Stability
15.4 Weighing Optimality Criteria
Part 4 International Monetary Cooperation
Chapter 16 The International Financial Architecture
16.1 The International Monetary System after Bretton Woods
16.2 The International Debt Crisis
16.3 Changes in the International Macroeconomic Environment in the 1990s
16.4 Proposals for Reforming the International Financial Architecture
Chapter 17 G-8 Policy Coordination
17.1 Why Coordinate? Theory
17.2 Comparative Statics
17.3 Post-Bretton Woods International Policy Coordination among the G-8 Countries
17.4 The US Current Account Deficit in the 2000s
Chapter 18 Monetary Unification
18.1 Economic Integration in Western Europe
18.2 European Monetary Integration
18.3 Monetary Union in West Africa
18.4 The Eastern Caribbean Currency Union
Part 5 The New International Macroeconomics
Chapter 19 Intertemporal Issues in International Macroeconomics
19.1 A Simple One-Good Model
19.2 A Two-Good Model
19.3 Introducing the Government
- Includes 20 optional econometric studiesand over 65 boxed examples and cases.
- Provides a uniquely unified, single model approach to international macroeconomics and then focuses this model on historic cases, institutions, and specific countries.
- Provides a strong policy orientation by an author who worked for many years at the IMF. Much more emphasis is given to small country exchange rate problems.
- Is supported by a website with extensive solutions for the problem sets, image gallery, and annual summer updates on the current financial crisis, including a 20-page update.
–Rodolphe Desbordes, University of Strathclyde
"This text's main strength is its unified approach, as it starts with a general model, and then considers special cases pertaining to particular countries, institutions, and historical time periods."
–Kenneth Kasa, Simon Fraser University
"Montiel’s friendly style, clarity of exposition, and rigorous treatment of the international topics make this a strong textbook."
–David Shepherd, University of Westminster
"This text’s exposition is very methodical, applying the method of comparative statics systematically for evaluating important contemporaneous policy issues as well as historical episodes."
–Watanabe Shinichi, International University of Japan
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