This book from the Centre for Economic Policy Research (CEPR) deals with the implications of the exchange rate regimes and capital flows of the 1990s for government macroeconomic policy-making and EC policy co-ordination. Under the fixed exchange rates of the 1950s, economists and policy-makers had a much clearer idea of the nature of the external constraints. The commitment to defending the exchange rate is stronger in the 1990s than in the 1970s and 1980s, but at the same time international capital flows are far greater and freer than in the 1950s and 1960s, with many countries able to borrow almost indefinitely and on good terms on the Eurodollar market in order to finance their balance-of-payments deficits. This volume, derived from a conference organised jointly by CEPR and the Bank of Greece, deals with these issues in depth and includes both cross-country comparisons and case studies of individual countries.
List of figures; List of tables; Preface; 1. Introduction George Alogoskoufis, Lucas Papademos and Richard Portes; 2. Global financial integration and current account inbalances Michael Artis and Tamim Bayoumi; 3. The solvency constraint and fiscal policy in an open economy David Currie and Paul Levine; 4. Relaxing the external constraint: Europe in the 1930s Barry Eichengreen; 5. External constraints on European unemployment George Alogoskoufis and Christopher Martin; 6. France and Germany in the EMS: the exchange rate constraint Daniel Cohen and Charles Wyplosz; 7. The external constraint in the UK Charles R. Bean; 8. Savings, investment, government finance, and the current account: the Dutch experience Hugo A. Keuzenkamp and Frederick van der Ploeg; 9. Fiscal deficits, seigniorage, and external debt: the case of Greece George Alogoskoufis and Nicos Christodoulakis; 10. Macroeconomic policy, external targets, and constraints: the case of Spain Juan J. Dolado and José Viñals; 11. Macroeconomic policy and the external constraint: the Danish experience Søren Bo Nielsen and Jørgen Søndergaard; Index.