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For the latest thinking about the international financial system, monetary policy, economic development, poverty reduction, and other critical issues, subscribe to Finance & Development (F&D). This lively quarterly magazine brings you in-depth analyses of these and other subjects by the IMF’s own staff as well as by prominent international experts. Articles are written for lay readers who want to enrich their understanding of the workings of the global economy and the policies and activities of the IMF.
For the latest thinking about the international financial system, monetary policy, economic development, poverty reduction, and other critical issues, subscribe to Finance & Development (F&D). This lively quarterly magazine brings you in-depth analyses of these and other subjects by the IMF’s own staff as well as by prominent international experts. Articles are written for lay readers who want to enrich their understanding of the workings of the global economy and the policies and activities of the IMF.
The Analysis of the effects of changes in exchange rates on foreign trade flows requires that account be taken of the simultaneous interaction among prices, incomes, and spending of the countries whose exchange rates have been altered and of the trading partners of these countries. The complexity of the problem increases when simultaneous changes in the exchange rates of several closely associated countries are examined. The model described below was developed to facilitate the assessment of the trade effects of such changes that would occur after an adjustment period of two to three years. Thus, the model is not directly relevant to estimating either short-run effects (within the first year after the exchange rate changes) or ultimate long-run effects (when all commodity and factor prices may be considered perfectly flexible, and labor and capital perfectly mobile).
This paper presents highlights of the IMF Meetings in 1968. The main themes of the IMF Annual Meeting were referred to by President Lyndon B. Johnson of the United States in his address at the opening joint session. He described 1968 as “a year of crisis in financial markets,” and the special drawing rights facility as a “major step in international financial cooperation.” Many IMF Governors returned to the theme that the containment of the potentially disruptive consequences of the events of the past year was due chiefly to a remarkable degree of international cooperation and collaboration.