The New International Money Game

by Aliber, Robert

• ISBN13: 9780230018945
• ISBN10: 0230018947
• Edition: 7th
• Format: Hardcover
• Copyright: 2011-05-15
• Publisher: Palgrave Macmillan

Summary

When Robert Z. Aliber'sThe International Money Gamefirst appeared in 1973, it was widely acclaimed as the best - and most entertaining - introduction to the arcane mysteries of international finance on the market. The seventh edition of this classic work has again been fully rewritten to take account of the immense changes in the world economy since the previous edition, and includes a new chapter on asset pricing and bubbles.

Author Biography

Robert Aliber is Professor of International Economics and Finance at the University of Chicago Graduate School of Business.

Table of Contents

List of Figure, Tables, and Boxes	p. xi
Preface and Acknowledgments	p. xii
List of Abbreviations and Acronyms	p. xiii
Introduction	p. 1
A System Is How the Pieces Fit	p. 8
Fitting the pieces: central bank monetary policies	p. 11
Fitting the pieces: the market in national currencies	p. 13
The waxing and waning of financial hegemony	p. 14
The plan of the book	p. 15
The Name of the Game Is Money - But the Disputes Are about Where the Jobs Are	p. 17
International finance	p. 17
Changes in the price of the US dollar	p. 17
The value of the currency, jobs, and inflation	p. 19
The management of currency values	p. 19
Parities and shocks	p. 20
Pegged currencies and floating currencies	p. 22
Devaluations and revaluations	p. 22
Exporting national problems	p. 26
The politics and technology of money	p. 26
The challenge of the newly industrializing countries	p. 28
The new international money game	p. 29
Interdependence of business and currency values	p. 30
International Monetary Arrangements, Money, and Politics
Gold - How Much Is a 'Barbarous Relic' Worth?	p. 35
The morphing of commodity gold into money	p. 35
Fiat currency and the money-back guarantee	p. 37
The decline in the monetary role of gold	p. 38
Changes in the purchasing power of gold	p. 42
What should be done with a monetary relic?	p. 46
Political implications of alternative monetary roles for gold	p. 48
The Gnomes of Zurich Play in the Largest Market in the World	p. 51
The global market in Currencies	p. 51
Spot exchange contracts, forward exchange contracts, and swaps	p. 53
Winners and losers in the currency market	p. 55
To Float or Not to Float, That's the Question	p. 56
Changes in the price of the US dollar	p. 59
The debate about exchange market arrangements - pegged vs. floating one more time	p. 61
Which way after floating?	p. 63
The Greatest Monetary Agreement in History	p. 65
The gold standard - rules and myths	p. 66
The gold standard in practice	p. 68
Monetary arrangements in the 1920s and the 1930s	p. 69
The Bretton Woods Agreement	p. 71
Stress on the IMF arrangements	p. 72
US payments deficits in the 1950s and 1960s	p. 73
Policy responses to the persistent payments imbalances	p. 75
'Paper gold' and special drawing rights	p. 76
The monetary impacts of the Vietnam War	p. 76
Changes in currency values	p. 77
The devaluation of the US dollar	p. 77
Monetary artifacts and the Smithsonian Agreement	p. 78
The EMU is not a bird - but the euro is money	p. 80
The future of monetary agreements	p. 81
Radio Luxembourg and the Eurodollar Market Are Both Offshore Stations	p. 82
Offshore stations and externalized activities	p. 82
The external currency market, née the Eurodollar market	p. 83
Where Eurodollars come from	p. 86
Links among offshore deposits denominated in different currencies	p. 88
A house of cards?	p. 89
The Dollar and Coca-Cola Are Both Brand Names	p. 92
Brands of money	p. 92
Market position of national currency brands	p. 95
Whither the US dollar on the currency hit parade?	p. 101
They Invented Money So They Could Have Inflation	p. 105
Inflation in the twentieth century	p. 106
Where does inflation come from?	p. 107
The inflation tax	p. 110
Watergate economics	p. 111
Reaganomics	p. 116
Inflation targeting û a new religion	p. 117
Global Imbalances and the Persistent US Trade Deficit	p. 118
A life-cycle model of a country's net creditor position	p. 119
Global imbalances - is the United States the cause or the victim?	p. 122
The sustainability of the US trade deficit	p. 126
Soft landings and hard landings	p. 131
Five Asset-Price Bubbles in 30 Years - A New World Record	p. 134
'Countries don't go bankrupt' - the 1970s surge in bank loans to Mexico, Brazil, Argentina, and other developing country borrowers	p. 138
'The mother of all asset price bubbles' - Tokyo real estate	p. 139
The asset price bubbles in Thailand et al.	p. 141
'Irrational Exuberance' and the bubble in US stocks	p. 142
The bubble in Anglo-Saxon real estate	p. 144
Linkages within each asset price bubble	p. 147
Cash flows and bubbles	p. 149
Links among successive waves of bubbles	p. 150
The uniqueness of the post-1970 period	p. 153
A New World Record - Four Financial Crises in 25 Years	p. 157
Cash flows and financial crises	p. 159
Mexico and the developing country debt crisis of the early 1980s	p. 161
The implosion of the asset price bubble in Tokyo	p. 163
The Mexican debacle of the mid-1990s and the Asian financial crises	p. 165
The implosion of the global housing bubble in 2007	p. 168
Financial crises, illiquidity, and insolvency	p. 172
Central Bankers Read Election Returns, Not Balance Sheets	p. 178
The holy grail of monetary reform	p. 178
Have floating exchange rates delivered on promises?	p. 179
Reform of the monetary system	p. 180
The politics of international financial stability	p. 181
Inflation is no accident	p. 182
Bureaucracy is a French word and a growth industry	p. 183
Managing the international economy	p. 185
The new mercantilists	p. 186
Nationalization and privatization	p. 187
Reform requires a consensus	p. 187
Monetary Reform - Where Do the Problems Go When Assumed To Have Been Solved?	p. 189
Competing national interests	p. 189
The institutional talisman	p. 190
Politicizing economic conflict: an international money	p. 193
New problems	p. 194
An SDR system	p. 196
The nonpolitical market solution	p. 198
Currency values as a policy instrument	p. 198
The limited scope for reform	p. 200
Economic expertise cannot solve political problems	p. 201
The Cost of 100 National Monies
Globalization 1.0 - The Silk Road to Asia and the Salt Caravans across the Sahara	p. 205
Nonmarket responses to the declining cost of economic distance	p. 209
Trade in money and securities	p. 210
Financial crises and an overview of Part II	p. 212
Taxation, Regulation, and the Level Playing Field	p. 219
Financial crisis leads to government creep	p. 219
Taxes and the level playing field	p. 222
Low-tax jurisdictions	p. 223
Economic impacts of different national tax rates	p. 224
Why national tax rates differ	p. 225
Corporate tax rates	p. 226
Economic impacts of corporate tax rate	p. 228
Taxes on foreign income	p. 231
Why don't the trains run on time?	p. 233
Privatization	p. 234
Banking on the Wire	p. 236
The financial crisis and global banking	p. 236
Competition in banking	p. 237
Branching and acquisitions	p. 238
Changes in the technology of payments	p. 239
The profits in banking	p. 240
The market area of a bank	p. 241
The use of checks for payments and the expansion of bank branches	p. 242
Competition among international banks	p. 244
Competitive edge	p. 245
Financial crises, banking, and globalization 100.0	p. 248
The Reverend Thomas Malthus, the OPEC Cartel, and the Price of Energy from 1800 to 2100	p. 250
A horse race - money in the bank vs. oil in the ground	p. 253
OPEC and Malthus	p. 255
Globalization 100.0 and the real price of energy	p. 256
The World Market for Bonds and Stocks	p. 260
The impacts of globalization	p. 260
The world markets for bond and stock - segmented or integrated?	p. 261
One world stock market?	p. 262
Segmentation or integration?	p. 262
The horse race in stocks	p. 265
MBSs, ABSs, CMOs, CDOs, Zeros, Swaps, Options, and Credit Default Swaps - The Revolution in Finance	p. 268
The new world of finance	p. 268
Securitization and the subprime mess	p. 270
What are hedge funds?	p. 271
Where do financial revolutions come from?	p. 272
Debt, stock prices, and junk bonds	p. 273
Financial engineering	p. 274
Index funds	p. 275
Swaps	p. 276
Derivatives and options	p. 277
'The collapsing house of cards?'	p. 279
Why Are Multinational Firms Mostly American?	p. 282
Direct foreign investment	p. 283
The new imperialism	p. 285
Patterns of market penetration	p. 286
Integration of manufacturing	p. 287
Why do firms invest abroad?	p. 288
Compensating advantages and superiority theorems	p. 289
US firms on the hit parade of multinationals	p. 293
The costs of direct foreign investment	p. 295
Whither the conflict?	p. 298
Japan - The First Superstate	p. 300
The Japanese challenge	p. 300
Secrets of the miracle	p. 301
The slowdown in the growth rate	p. 303
Japan, Inc.	p. 304
An unfair competitive advantage?	p. 305
The roles of the capitalists and the bankers	p. 306
The mother of all asset price bubbles	p. 307
Lousy demographics or the negative wealth effects?	p. 309
The external impacts of the Japanese business cycle	p. 310
The export of imbalances	p. 311
The world's largest creditor country	p. 312
China - The 800-Pound Gorilla	p. 314
China is big history	p. 314
The hermit kingdom and its sequel	p. 315
Limits to Chinese growth	p. 316
Export-led growth, the trade surplus, and the asset price bubble	p. 319
The overseas Chinese economies	p. 320
The savings-investment paradox	p. 323
From Marxist Command Economies to Market Capitalism	p. 325
The implosion of an empire	p. 325
What is a transition economy?	p. 326
The ruble was a heavy currency	p. 326
The command economy and the market economy	p. 327
Where do market institutions come from?	p. 330
Industrial restructuring	p. 330
Macro stabilization and the price level	p. 332
Privatization	p. 333
The debacle in Russian finance	p. 334
Prime Minister Putin's Seven Fat Years	p. 335
Fitting the Pieces Together Once Again	p. 337
The impacts of the 2007 financial crisis	p. 337
A common international currency?	p. 338
The collapse of rules	p. 339
New rules or new international monetary institutions?	p. 340
Exchange controls	p. 342
The role of gold	p. 342
Index	p. 345
Table of Contents provided by Ingram. All Rights Reserved.