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International Finance and Open-Economy Macroeconomics pp 635–666Cite as

Current Problems

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Abstract

In this final chapter we examine some current problems of the international monetary system. Any choice is inevitably arbitrary, and what is a problem today might cease to be such tomorrow. However, the problems that we are going to consider are likely to present a theoretical interest to students of international finance and open-economy macroeconomics also in the future. In any case we owe an explanation for the omission of the standard topic called “plans for reform of the international monetary system”.

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Notes

  1. 1.

    It should be clarified at the outset that in this chapter the Tobin tax is taken in its original meaning, namely as a tax on all foreign-exchange transactions, without considering extensions to all kinds of financial transactions, as is sometimes suggested.

  2. 2.

    Frankel (1996; p. 22) gives a slightly different formula, in which the term \((\tilde{r} - r)/r\) is neglected.

  3. 3.

    To ensure that profit is not merely notional, namely not actually realised, it is necessary to consider an interval over which the speculative stocks of foreign exchange are the same at the beginning and at the end. Thus s 1, s 2 must be such that

    $$\displaystyle{ \int _{s_{1}}^{s_{2}}E_{sc}(t)dt = 0. }$$

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  1. Classe di Scienze Morali, Accademia Nazionale dei Lincei, Rome, Italy

    Giancarlo Gandolfo

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Gandolfo, G. (2016). Current Problems. In: International Finance and Open-Economy Macroeconomics. Springer Texts in Business and Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-49862-0_24

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  • DOI: https://doi.org/10.1007/978-3-662-49862-0_24

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