Abstract
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.
This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman
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De Grauwe, P. (1987). International Monetary Policy. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_1010-1
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DOI: https://doi.org/10.1057/978-1-349-95121-5_1010-1
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