Please enable JavaScript.
Coggle requires JavaScript to display documents.
International Monetary System - Coggle Diagram
International Monetary System
The Euro and the European Monetary Union
The Current Exchange Rate Arrangements
Current Exchange Rate Arrangements
No separate legal tender
Currency board:
Conventional fixed pegs:
Stabilized arrangement:
Crawling peg:
Crawl-like arrangement:
Pegged exchange rate within horizontal banks
Other managed arrangement:
Floating:
Free floating:
European Monetary System
main instruments
ECU
is a “basket” currency constructed as a weighted average of the currencies of member countries of the European Union (EU).
serves as the accounting unit of the EMS and plays an important role in the workings of the exchange rate mechanism.
ERM
is based on a “parity grid” system, which is a system of par values among ERM currencies.
refers to the procedure by which EMS member countries collectively manage their exchange rates.
The Asian Currency Crisis
Fixed versus Flexible Exchange Rate Regimes
Evolution of the International Monetary System
International Monetary System
movements of capital
are accommodated
exchange rates
among currencies are determined.
Institutional the framework within which international payments are made
Evolution of the International
Monetary System
Bimetallism: Before 1875
Bimetallism was a “double standard” in the sense that free coinage was maintained for both gold and silver
Classical Gold Standard: 1875-1914
Bretton Woods System:1945-1972
Named for a 1944 meeting of 44 nations at Bretton Woods, New Hampshire.
The purpose was to design a postwar international monetary system.
Described as a dollar-based gold-exchange standard.
Triffin paradox explains the collapse of this system in the early 1970s
The Flexible Exchange Rate
Regime: 1973–Present
Gold was abandoned as an international reserve asset.
Non-oil-exporting countries and less-developed countries were given greater access to IMF funds.
Flexible exchange rates were declared acceptable to the IMF members.