The economics of money, banking, and financial markets

Global  Will the Euro Survive?  446

Capital Controls ...........................................................................................................................447

Controls on Capital Outflows ............................................................................................. 447

Controls on Capital Inflows................................................................................................ 447

The Role of the IMF ....................................................................................................................448

Should the IMF Act as an International Lender of Last Resort? ........................................... 448

International Considerations and Monetary Policy ..........................................................449

Direct Effects of the Foreign Exchange Market on Monetary Policy ..................................... 449

Exchange Rate Considerations ............................................................................................ 450

To Peg or Not to Peg: Exchange-Rate Targeting as an Alternative Monetary  

Policy Strategy......................................................................................................................450

Advantages of Exchange-Rate Targeting .............................................................................. 450

Disadvantages of Exchange-Rate Targeting .......................................................................... 451

When Is Exchange-Rate Targeting Desirable for Industrialized Countries? .......................... 453

When Is Exchange-Rate Targeting Desirable for Emerging Market Countries? .................... 454

Currency Boards ................................................................................................................. 454

Global  Argentina’s Currency Board  455

Dollarization ...................................................................................................................... 455

Summary 456  •  Key Terms 457  •  Questions 457  •  Applied Problems 458  •   

Data Analysis Problems  459   •   Web Exercises  460   •   Web References  460