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International Monetary System - Coggle Diagram
International Monetary System
Evolution of the International Monetary System :green_cross:
Bimetallism: Before 1875
Classical Gold Standard: 1875-1914
Evolution of the International Monetary System
Classical Gold Standard: Adjustment Mechanism
International Monetary System
Price-Specie-Flow Mechanism
Bretton Woods System:1945-1972
The Flexible Exchange Rate
Regime: 1973–Present
Special Drawing Rights (SDR)
The Current Exchange Rate Arrangements
Current Exchange Rate Arrangements
Crawling peg
Crawl-like arrangement
Stabilized arrangement
Pegged exchange rate within horizontal banks
Conventional fixed pegs
Other managed arrangement
Currency board
Floating
No separate legal tender
Free floating
European Monetary System
Objectives
◦ To coordinate exchange rate policies vis-à-vis non-European currencies.
To pave the way for the eventual European Monetary Union.
To establish a “zone of monetary stability” in Europe.
EMS main instruments: ECU
The European Currency Unit (ECU) is a “basket” currency constructed as a weighted average of the currencies of member countries of the European Union (EU).
The weights are based on each currency’s relative GNP and share in intra-EU trade.
The ECU serves as the accounting unit of the EMS and plays an important role in the workings of the exchange rate mechanism.
EMS main instruments: ERM
The Exchange Rate Mechanism (ERM) refers to the procedure by which EMS member countries collectively manage their exchange rates.
The par values in the parity grid are computed by first defining the par values of EMS currencies in terms of the ECU.
The ERM is based on a “parity grid” system, which is a system of par values among ERM currencies.
The Euro and the European Monetary Union
Brief history of the Euro
Benefits and Costs of Monetary
Union
Brief history of the Euro
The Asian Currency Crisis
Origins of the Asian Currency Crisis
Asian Currency Crisis
The Asian Currency Crisis (1997)
Lessons from Asian Currency Crisis
Fixed versus Flexible Exchange Rate Regimes
Fixed versus Flexible Exchange Rate Regimes
Easier external adjustments.
National policy autonomy (independence).
“Good” international monetary system
liquidity
adjustment
confidence