(BQ) Part 2 book "International economics" has contents: Introduction to international macroeconomics, exchange rates, the balance of payments, applications and policy issues, the euro, topics in international macroeconomics. | q 1•2•3•4•5•6•7•8•9•10•11•12•13•14•15•16•17•18•19•20•21•22 12 The Global Macroeconomy q So much of barbarism, however, still remains in the transactions of most civilized nations, that almost all independent countries choose to assert their nationality by having, to their inconvenience and that of their neighbors, a peculiar currency of their own. John Stuart Mill Neither a borrower nor a lender be; / For loan oft loseth both itself and friend. / And borrowing dulls the edge of husbandry. Polonius, in William Shakespeare’s Hamlet History, in general, only informs us of what bad government is. Thomas Jefferson I 1 Foreign Exchange: Currencies and Crises 2 Globalization of Finance: Debts and Deficits 3 Government and Institutions: Policies and Performance 4 Conclusions nternational macroeconomics is devoted to the study of large-scale economic interactions among interdependent economies. It is international because a deeper exploration of the interconnections among nations is essential to understanding how the global economy works. It is macroeconomic because it focuses on key economywide variables, such as exchange rates, prices, interest rates, income, wealth, and the current account. In the chapters that follow, we use familiar macroeconomic ideas to examine the main features of the global macroeconomy. The preceding quotations indicate that the broad range of topics and issues in international macroeconomics can be reduced to three key elements: the world has many monies (not one), countries are financially integrated (not isolated), and in this context economic policy choices are made (but not always very well). n Money John Stuart Mill echoes the complaints of many exasperated travelers and traders when he bemoans the profusion of different monies around the world. Mill’s vision of a world with a single currency is even more distant today: in his day, the number of currencies was far smaller than the 411 412 Part 5 n Introduction to .
