The New Palgrave Dictionary of Economics

Living Edition
| Editors: Palgrave Macmillan

International Monetary Policy

  • Paul De Grauwe
Living reference work entry


One of the main characteristics of the international monetary system is the absence of an international monetary authority (central bank) with policy making powers comparable to those central banks have at the national level. Whereas national central banks typically regulate domestic money markets in one way or another, there is no comparable authority to regulate international money markets. As a result, international monetary conditions will be the outcome of a decentralized decision-making process, in which market forces play a role together with the policies of a few important countries. Ultimately, therefore, international monetary relations will be influenced by the nature of the cooperation (or the lack of cooperation) among the central banks of the major countries.


Exchange Rate Monetary Policy Central Bank Flexible Exchange Rate International Reserve 
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Copyright information

© The Author(s) 1987

Authors and Affiliations

  • Paul De Grauwe
    • 1
  1. 1.