Voyevodins' Library _ "International Business: Competing in the Global Marketplace" / Charles W.L. Hill ... Chapter 10 ... gross domestic product (GDP), gross fixed capital formation, gross national product (GNP), group, Heckscher-Ohlin theory, hedge fund, Helms-Burton Act, historic cost principle, home country, horizontal differentiation, horizontal foreign direct investment, host country, human development index, human resource management, import quota, individualism, individualism versus collectivism, inefficient market, infant industry argument, inflows of FDI, initial rate, innovation, integrating mechanisms, intellectual property, internal forward rate, internalization theory, International Accounting Standards Committee (IASC), international business, international division, International Fisher Effect, International Monetary Fund (IMF), international strategy, international trade, ISO 9000, joint venture, just-in-time (JIT), lag strategy, late-mover advantage, law of one price, lead market, lead strategy, lean production systems, learning effects Voevodin's Library: gross domestic product (GDP), gross fixed capital formation, gross national product (GNP), group, Heckscher-Ohlin theory, hedge fund, Helms-Burton Act, historic cost principle, home country, horizontal differentiation, horizontal foreign direct investment, host country, human development index, human resource management, import quota, individualism, individualism versus collectivism, inefficient market, infant industry argument, inflows of FDI, initial rate, innovation, integrating mechanisms, intellectual property, internal forward rate, internalization theory, International Accounting Standards Committee (IASC), international business, international division, International Fisher Effect, International Monetary Fund (IMF), international strategy, international trade, ISO 9000, joint venture, just-in-time (JIT), lag strategy, late-mover advantage, law of one price, lead market, lead strategy, lean production systems, learning effects


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Chapter 10 Outline

Notes

  1. D. Driscoll, What is the International Monetary Fund? (Washington, DC: IMF, July 1997).

  2. The argument goes back to 18th century philosopher David Hume. See D. Hume, "On the Balance of Trade," reprinted in The Gold Standard in Theory and in History, ed. B. Eichengreen. (London: Methuen, 1985).

  3. R. Solomon, The International Monetary System, 1945 - 1981. (New York: Harper & Row, 1982).

  4. International Monetary Fund, World Economic Outlook, 1998 (Washington, DC: IMF, May 1998).

  5. For an extended discussion of the dollar exchange rate in the 1980s, see B. D. Pauls, "US Exchange Rate Policy: Bretton Woods to the Present," Federal Reserve Bulletin, November 1990, pp. 891 - 908.

  6. For a feel for the issues contained in this debate, see P. Krugman, Has the Adjustment Process Worked? (Institute for International Economics, 1991); "Time to Tether Currencies," The Economist, January 6, 1990, pp. 15 - 16; P. R. Krugman and M. Obstfeld, International Economics: Theory and Policy (New York: Harper Collins, 1994); J. Shelton, Money Meltdown (New York: Free Press, 1994); and S. Edwards, "Exchange Rates and the Political Economy of Macroeconomic Discipline," American Economic Review 86, no. 2 (May 1996), pp. 159 - 63.

  7. The argument is made by several prominent economists, particularly Stanford's Robert McKinnon. See R. McKinnon, "An International Standard for Monetary Stabilization," Policy Analyses in International Economics 8 (1984). The details of this argument are beyond the scope of this book. For a relatively accessible exposition, see P. Krugman, The Age of Diminished Expectations (Cambridge, MA: MIT Press, 1990).

  8. A. R. Ghosh and A. M. Gulde, "Does the Exchange Rate Regime Matter for Inflation and Growth?" Economic Issues, no. 2, (1997).

  9. "The ABC of Currency Boards," The Economist, November 1, 1997, p. 80.

  10. For a time, the plan was to introduce a common currency by 1997, but in July 1995 this was changed to 1999, and many think this date cannot be attained. L.

    Barber, "EU Leaders Plan 1999 Launch Date of Single Currency," Financial Times, June 27, 1995, p. 1.

  11. N. Colchester and D. Buchan, Europower (New York: Random House, 1990), and D. Swann, The Economics of the Common Market (London: Penguin Books, 1990).

  12. M. Wolf, "Emu May Not Be Dead After All." Financial Times, August 1, 1994, p. 13.

  13. P. Norman, "A test for the ERM and a Warning for the Emu," Financial Times, March 7, 1995, p. 2.

  14. International Monetary Fund, World Economic Outlook, 1998.

  15. Ibid.

  16. For a summary of the arguments for debt reductions, see "And Forgive Us Our Debts: A Survey of the IMF and the World Bank," The Economist, October 12, 1991, pp. 23 - 33, and Krugman, Age of Diminished Expectations.

  17. See P. Carroll and C. Torres, "Mexico Unveils Program of Harsh Fiscal Medicine," The Wall Street Journal, March 10, 1995, pp. A1, A6, and "Putting Mexico Together Again," The Economist, February 4, 1995, p. 65.

  18. S. Erlanger, "Russia Will Test a Trading Band for the Ruble," New York Times, July 7, 1995, p. 1; C. Freeland, "Russian to Introduce a Trading Band for Ruble Against Dollar," Financial Times, July 7, 1995, p. 1. J. Thornhill, "Russians Bemused by 'Black Tuesday,'" Financial Times, October 12, 1994, p. 4; R. Sikorski, "Mirage of Numbers," The Wall Street Journal, May 18, 1994, p. 14; "Can Russia Fight Back?", The Economist, June 6, 1998, pp. 47 - 48; J. Thornhill, "Russia's Shrinking Options," Financial Times, August 19, 1998, page 19.

  19. World Trade Organization, Annual Report, 1997, vol. II, table III 69.

  20. J. Ridding and J. Kynge, "Complacency Gives Way to Contagion," Financial Times, January 13, 1998, p. 8.

  21. J. Burton and G. Baker, "The Country that Invested Its Way into Trouble," Financial Times, January 15, 1998, p. 8.

  22. P. Shenon, "The Suharto Billions," New York Times, January 16, 1998, p. 1.
  1. World Bank, 1997 World Development Report (Oxford: Oxford Univ. Press, Table 11).

  2. Ridding and Kynge, "Complacency Gives Way to Contagion."

  3. Burton and Baker. "The Country that Invested Its Way into Trouble."

  4. "Bitter Pill for the Thais," The Straits Times, July 5, 1997, p. 46.

  5. World Bank, 1997 World Development Report, Table 2.

  6. International Monetary Fund, press release no. 97/37, August 20, 1997.

  7. T. S. Shorrock, "Korea Starts Overhaul; IMF Aid Hits $60 Billion," Journal of Commerce, December 8, 1997, p. 3A.

  8. Particularly Jeffery Sachs. See J. Sachs, "Economic Transition and Exchange Rate Regime," American Economic Review 86, no. 92 (May 1996), pp. 147 - 52, and J. Sachs, "Power unto Itself," Financial Times, December 11, 1997, p. 11.

  9. Sachs, "Power unto Itself."

  10. Martin Wolf, "Same Old IMF Medicine," Financial Times, December 9, 1997, p. 12.

  11. Sachs, "Power unto Itself."

  12. P. Gumbel and B. Coleman, "Daimler Warns of Severe 95 Loss Due to Strong Mark," New York Times, June 29, 1995, pp. 1, 10, and M. Wolf, "Daimler-Benz Announces Major Losses," Financial Times, June 29, 1995, p. 1.
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