Edited by

Jacob A. Frenkel

and

Morris Goldstein

VOLUME 1

International Monetary Fund

© 1996 International Monetary Fund

David D. Driscoll of the External Relations Department of the International Monetary Fund was the volume editor of this work.

Cataloging-in Publication Data

Functioning of the international monetary system / edited by Jacob A. Frenkel and Morris Goldstein. — (Washington, D.C.) : International Monetary Fund, (1996) 2v. cm.

ISBN 1-55775-554-X

1. International finance 2. International economic relations 3. Foreign exchange 3. Europe—Economic integration I. Frenkel, Jacob A. II. Goldstein, Morris, 1994–HG3881.F86 1996

Address orders to:

External Relations Department, Publication Services

International Monetary Fund, Washington D.C. 20431

Telephone: (202) 623-7430; Telefax: (202) 623-7201

Internet: publications@imf.org

CONTENTS

• VOLUME 1

• Introduction

• International Monetary Policy Coordination

• 1. International Coordination of Economic Policies

  • jacob a. frenkel, morris goldstein, and paul r. masson

• 2. International Institutions, Surveillance, and Policy Coordination

  • andrew crockett

• 3. International Coordination of Fiscal Policies

  • vito tanzi

• 4. Policy Coordination with Model Uncertainty

  • atish r. ghosh and paul r. masson

• 5. Simulating Effects of Coordinated Versus Uncoordinated Policy Rules

  • jacob a. frenkel, morris goldstein, and paul r. masson

• European Monetary System, European Economic and Monetary Union, German Unification

• 6. Economic and Monetary Integration and the Aggregate Demand for Money in the EMS

  • jeroen j. m. kremers and timothy d. lane

• 7. Seigniorage in the EC

  • daniel gros

• 8. Optimal Taxation Policies in the EMS

  • carlos a. vÉgh and pablo e. guidotti

• 9. Economic and Monetary Union in Europe and National Budgets

  • a. lans bovenberg, jeroen j. m. kremers, and paul r. masson

• 10. Macroeconomic Consequences of German Unification

  • paul r. masson and guy meredith

• Exchange Rate Determination, Alternative Exchange Arrangements, Possible Reform of the System

• 11. Lessons From Empirical Models of Exchange Rates

  • peter isard

• 12. Structural Models of the Dollar

  • charles adams and bankim chadha

• 13. Speculative Attack and Target Zone Models of Exchange Rates

  • robert p. flood and peter m. garber

• 14. Balance of Payments Crises in a Cash-In-Advance Economy

  • guillermo a. calvo

• 15. Macroeconomic Policy Implications of Currency Zones

  • jacob a. frenkel and morris goldstein

• 16. Policy Assignment with Somewhat Flexible Exchange Rates

  • james a. boughton

• VOLUME 2

• 17. Should the International Monetary System Be Reformed?

  • jacob a. frenkel

• 18. Exchange Rate Variability and Slow Growth of Trade

  • paul de grauwe

• 19. Financial Market Integration and Exchange Rate Policy

  • donald j. mathieson and liliana rojas-suÁrez

• 20. Real Exchange Rate Dynamics in a Small, Primary Exporting Country

  • mohsin s. khan and peter j. monteil

• 21. Exchange Rate Policies in Developing Countries

  • bijan b. aghevli and peter j. montiel

• 22. Currency Convertibility and Economies in Transition

  • joshua e. greene and peter isard

• Foreign Exchange Markets, Central Bank Intervention, International Reserves

• 23. Exchange Rate Forecasting and the Foreign Exchange Market

  • jeffrey a. frankel and kenneth froot

• 24. Options on Foreign Exchange and Exchange Rate Expectations

  • eduardo r. borensztein and michael p. dooley

• 25. Effectiveness of Foreign Exchange Intervention, 1985-88

  • maurice obstfeld

• 26. Transactions Costs and Vehicle Currencies

  • stanley w. black

• 27. International Use of Currencies: The Deutsche Mark

  • george s. tavlas

• 28. In Search of a Monetary Anchor

  • warren l. coats, jr.

• 29. Currency Composition of Foreign Exchange Reserves

  • michael p. dooley, j. paul lizondo, and donald j. mathieson

• 30. Impasse on the Role of the SDR

  • jacques j. polak