Table Of ContentINTERNATIONAL ECONOMIC ASSOCIATION
General Editors: Sir Austin Robinson ( 1950-80), Sir Douglas Hague ( 1980-6 ),
Michael Kaser ( 1986- )
Kenneth J. Arrow and Michael J. Boskin (editors)
THE ECONOMICS OF PUBLIC DEBT
Bela Balassa and Herbert Giersch (editors)
ECONOMIC INCENTIVES
William J. Baumol (editor)
PUBLIC AND PRIVATE ENTERPRISE IN A MIXED ECONOMY
Ansley J. Coale (editor)
ECONOMIC FACTORS IN POPULATION GROWTH
Bela Csikos-Nagy and Douglas Hague (editors)
THE ECONOMICS OF RELATIVE PRICES
Bela Csikos-Nagy and David G. Young (editors)
EAST-WEST ECONOMIC RELATIONS IN THE CHANGING GLOBAL ENVIRONMENT
Marcello de Cecco and Jean-Paul Fitoussi (editors)
MONETARY THEORY AND ECONOMIC INSTITUTIONS
Leon H. Dupriez and Douglas Hague (editors)
ECONOMIC PROGRESS (Second Edition by Austin Robinson)
Martin S. Feldstein and Robert P. Inman (editors)
THE ECONOMICS OF PUBLIC SERVICES
Armin Gutowski. A. A. Arnaudo and Hans-Eckart Scharrer
FINANCING PROBLEMS OF DEVELOPING COUNTRIES
Karl Jungen felt and Douglas Hague (editors)
STRUCTURAL ADJUSTMENT IN DEVELOPED OPEN ECONOMIES
T. S. Khachaturov and P. B. Goodwin (editors)
THE ECONOMICS OF LONG-DISTANCE TRANSPORTATION
Pierre Maillet, Douglas Hague and Chris Rowland (editors)
THE ECONOMICS OF CHOICE BETWEEN ENERGY SOURCES
Edmond Malinvaud and Jean-Paul Fitoussi (editors)
UNEMPLOYMENT IN WESTERN COUNTRIES
R. C. 0. Matthews and G. B. Stafford (editors)
THE GRANTS ECONOMY AND COLLECTIVE CONSUMPTION
Franco Modigliani and Richard Hemming (editors)
THE DETERMINANTS OF NATIONAL SAVING AND WEALTH
fosef Pajestka and C. H. Feinstein (editors)
THE RELEVANCE OF ECONOMIC THEORIES
Mark Perlman (editor)
THE ECONOMICS OF HEALTH AND MEDICAL CARE
THE ORGANIZATION AND RETRIEVAL OF ECONOMIC KNOWLEDGE
Austin Robinson, P. R. Brahmananda and L. K. Deshpande (editors)
EMPLOYMENT POLICY IN A DEVELOPING COUNTRY (2 volumes)
Paul A. Samuelson (editor)
INTERNATIONAL ECONOMIC RELATIONS
Christian Schmidt (editor)
THE ECONOMICS OF MILITARY EXPENDITURES
Takashi Shiraishi and Shigeto Tsuru
ECONOMIC INSTITUTIONS IN A DYNAMIC SOCIETY: SEARCH FOR A NEW FRONTIER
Christian Schmidt and Frank Blackaby (editors)
PEACE, DEFENCE AND ECONOMIC ANALYSIS
Joseph E. Stiglitz and G. Frank Mathewson (editors)
NEW DEVELOPMENTS IN THE ANALYSIS OF MARKET STRUCTURE
Richard Stone and William Peterson (editors)
ECONOMETRIC CONTRIBUTIONS TO PUBLIC POLICY
Nina G. M. Watts (editor)
ECONOMIC RELATIONS BETWEEN EAST AND WEST
ECONOMIC GROWTH AND RESOURCES
Edmond Malinvaud (editor)
1 THE MAJOR ISSUES
R. C. 0. Matthews (editor)
2 TRENDS AND FACTORS
Christopher Bliss and M. Boserup (editors)
3 NATURAL RESOURCES
Irma Adelman (editor)
4 INTERNATIONAL POLICIES
Shigeto Tsuru (editor)
5 PROBLEMS RELATED TO JAPAN
HUMAN RESOURCES, EMPLOYMENT AND DEVELOPMENT
Shigeto Tsuru (editor)
I THE ISSUES
Paul Streeten and Harry Maier (editors)
2 CONCEPTS, MEASUREMENT AND LONG-RUN PERSPECTIVE
Burton Weisbrod and Helen Hughes (editors)
3 THE "PROBLEM OF DEVELOPED COUNTRIES AND THE INTERNATIONAL
ECONOMY
Victor L. Urquidi and Saul Trejo Reyes (editors)
4 LATIN AMERICA
Samir Amin (editor)
5 DEVELOPING COUNTRIES
STRUCTURAL CHANGE, ECONOMIC INTERDEPENDENCE AND WORLD
DEVELOPMENT
Victor L. Urquidi (editor)
I BASIC ISSUES
Silvio Borner and Alwyn Taylor (editors)
2 NATURAL AND FINANCIAL RESOURCES FOR DEVELOPMENT
Luigi Pasinetti and Peter Lloyd (editors)
3 STRUCTURAL CHANGE AND ADJUSTMENT IN THE WORLD ECONOMY
ECONOMY
John H. Dunning and Mikoto Usui (editors)
4 ECONOMIC INTERDEPENDENCE
THE BALANCE BETWEEN INDUSTRY AND AGRICULTURE IN ECONOMIC
DEVELOPMENT
Kenneth J. Arrow (editor)
I BASIC ISSUES
Jeffrey G. Williamson and Vadiraj R. Panchamukhi (editors)
2 SECTOR PROPORTIONS
Sukhamoy Chakravarty (editor)
3 MANPOWER AND TRANSFERS
Irma Adelman and Sylvia Lane (editors)
4 SOCIAL EFFECTS
N urul I slam (editor)
5 FACTORS INFLUENCING CHANGE
The first fifty IEA conference volumes published by Macmillan are available as a set.
Please see the copyright page for information on Series Standing Orders.
International Finance
and Trade in a
Polycentric World
Proceedings of a Conference held in Basel by the
International Economic Association
Edited by
Silvio Borner
M
in association with the
MACMILLAN PALGRAVE MACMILLAN
PRESS
© International Economic Association 1988
Softcover reprint of the hardcover !st edition 1988 978-0-333-44844-1
All rights reserved. No reproduction, copy or transmission
of this publication may be made without written permission.
No paragraph of this publication may be reproduced, copied
or transmitted save with written permission or in accordance
with the provisions of the Copyright Act 1956 (as amended).
or under the terms of any licence permitting limited copying
issued by the Copyright Licensing Agency, 33-4 Alfred Place,
London WCIE 7DP.
Any person who does any unauthorised act in relation to
this publication may be liable to criminal prosecution and
civil claims for damages.
First published 1988
Published by
THE MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 2XS
and London
Companies and representatives
throughout the world
British Library Cataloguing in Publication Data
International finance and trade in a
polycentric world: proceedings of a
conference held in Basel by the
International Economic Association.-
( Macmillan/IEA; 92).
l. Foreign trade. Finance
I. Borner, Silvio, /94/-
382
ISBN 978-1-349-09747-0 ISBN 978-1-349-09745-6 (eBook)
DOI 10.1007/978-1-349-09745-6
Series Standing Order
If you would like to receive future titles in this series as they are
published, you can make use of our standing order facility. To place a
standing order please contact your bookseller or, in case of difficulty,
write to us at the address below with your name and address and the
name of the series. Please state with which title you wish to begin your
standing order. (If you live outside the United. Kingdom we may not
have the rights for your area, in which case we will forward your order
to the publisher concerned.)
Customer Services Department, Macmillan Distribution Ltd,
Houndmills, Basingstoke, Hampshire, RG21 2XS, England.
Contents
The International Economic Association IX
Acknowledgements XI
List of Contributors and Participants xiii
Abbreviations and Acronyms XVI
Preface XVIII
Introduction xix
Silvio Borner
PART I THE INTERNATIONAL DEBT PROBLEM
1 Alternative Approaches and Solutions to the Debt of
Developing Countries
Albert Fish/ow 3
2 The Debt Problem: From Crisis Management towards
Sustainable Solutions
Franz Liitolf 21
3 Escaping Confrontation: Latin America's Debt Crisis in
the Late 1980s
Edmar L. Bacha 38
Comment Shafiqul Islam 52
Comment Juergen B. Donges 61
Comment G. Matioukhine 67
Discussion on Part I Rene Capitelli (Rapporteur) 72
v
VI Contents
PART II A NEW INTERNATIONAL TRADING SYSTEM
4 Prospects for Liberalising the International Trading System
Anne 0. Krueger 79
5 A Developing Country's Perspective of the International
Trade System
Wontack Hong 102
6 A New Approach to East-West Trade
Bela Csikbs-Nagy 120
Comment Frank Wolter 132
Comment Henryk Kierzkowski 139
Discussion on Part II Martin Maurer (Rapporteur) 145
PART III A NEW MONETARY FRAMEWORK
7 The Flexible Exchange Rate System: Experience and
Alternatives
Rudiger Dornbusch and Jeffrey Frankel 151
Comment Charles A. E. Goodhart 193
Comment Alwyn B. Taylor 203
Discussion on Part III Julian S. A/worth (Rapporteur) 209
PART IV NEW FORMS OF INTERNATIONALISATION IN
BUSINESS
8 Recent Trends in International Business: A New Analysis
Mark Casson 215
9 Japan's Foreign Direct Investment: Facts and Theoretical
Considerations
Ryutaro Kamiya 241
Contents VII
Comment Sanjaya Lall 290
Comment Hugh Patrick 294
Discussion on Part IV B. Michael Gilroy (Rapporteur) 300
PART V INTERNATIONAL POLICY CO-ORDINATION
WITHIN A WORLD OF STRUCTURAL CHANGE
10 Current Issues in the International Macroeconomic Policy
Debate
Oliver Landmann 307
11 International Co-ordination of Domestic Industrial Policies
Motoshige ltoh 324
12 Time Consistency and Trigger Mechanisms in
Open-Economy Monetary Policy Games
Matthew B. Canzoneri and Dale W. Henderson 338
Comment Jacques Mistral 356
Comment Mart in Hell wig 360
Discussion on Part V Erwin Heri (Rapporteur) 369
PART VI REVIEW AND CONCLUSIONS
Concluding Remarks on Part I
Silvio Borner 373
Concluding Remarks on Part II
Georg Rich 377
Concluding Remarks on Part III
Alexander K. Swoboda 381
Concluding Remarks on Part IV
Charles P. Kindleberger 385
VIII Contents
Concluding Remarks on Part V
Koichi Hamada 389
Overview of the Conference
Kenneth J. Arrow 392
Index of Names 397
Index of Subjects 402
International Economic
Association
A non-profit organisation with purely scientific aims, the International
Economic Association (IEA) was founded in 1950. It is in fact a
federation of national economic associations and presently includes
fifty-eight such professional organisations from all parts of the world.
Its basic purpose is the development of economics as an intellectual
discipline. Its approach recognises a diversity of problems, systems and
values in the world and also takes note of methodological diversities.
The IEA has, since its creation, tried to fulfil that purpose by
promoting mutual understanding of economists from the West and the
East, as well as from the North and the South, through the organisation
of scientific meetings and common research programmes, and by means
of publications on problems of current importance. During its thirty
seven years of existence, it has organised seventy-nine round-table
conferences for specialists on topics ranging from fundamental theories
to methods and tools of analysis and major problems of the present-day
world. Eight triennal World Congresses have also been held, which
have regularly attracted the participation of a great many economists
from all over the world. The proceedings of all these meetings are
published by Macmillan.
The Association is governed by a Council, composed of representatives
of all member associations, and by a fifteen-member Executive
Committee which is elected by the Council. The present Executive
Committee ( 1986-89) is composed as follows:
President: Professor Amartya Sen, India
Vice-President: Professor Bela Csik6s-Nagy, Hungary
Treasurer: Professor Luis Angel Rojo, Spain
Past President: Professor Kenneth J. Arrow, USA
Other Members: Professor Edmar Lisboa Bacha, Brazil
Professor Ragnar Bentzel, Sweden
Professor Oleg T. Bogomolov, USSR
Professor Silvio Borner, Switzerland
Professor P. R. Brahmananda, India
Professor Phyllis Deane, United Kingdom
IX
