Chapter 1 The Balance of Payments 1
1.1 Accounting Principles 1
1.2 Balance-of-Payments Structure 4
1.3 Classifications of Transaction 9
1.4 Balance-of-Payments Equilibrium 12
Summary 14
Chapter 2 Balance-of-Payments Adjustment and Determinants of the Balance of Trade and Payments 17
2.1 BOP Adjustments under Fixed Exchange Rates 17
2.2 Determinants of Balance of Trade and Payments 32
Summary 49
Chapter 3 International Monetary System 52
3.1 The Gold Standard Era,1870-1914 52
3.2 The Inter-War Period,1919-1939 55
3.3 The Bretton Woods Period,1946-1971 56
3.4 The Floating Rate Period,1971 to Present 63
3.5 Optimum Currency Areas and the EMS 66
3.6 The Euro 68
Summary 69
Chapter 4 Exchange-Rate Systems 71
4.1 Foreign Exchange-Rate Practices 71
4.2 Fixed Exchange-Rate System 74
4.3 Flexible Exchange-Rate System 79
4.4 Hybrid Exchange-Rate System 84
4.5 Adjustable Pegged Rates 85
4.6 The Crawling Peg 91
4.7 Exchange Controls 93
4.8 Currency Boards 94
4.9 Dollarization 96
Summary 97
Chapter 5 Foreign-Exchange Market and Financial Derivatives 99
5.1 Understanding the Foreign-Exchange Market 99
5.2 Spot Market 104
5.3 Financial Derivatives 111
5.4 Foreign-Exchange Market Speculation 129
Summary 132
Chapter 6 Exchange Rates,Interest Rates,and Interest Parity 135
6.1 Interest Parity 135
6.2 Interest Arbitrage 138
6.3 Interest Rates and Inflation 141
6.4 Exchange Rates,Interest Rates,and Inflation 141
6.5 Expected Exchange Rates and Term Structure of Interest Rates 142
Summary 152
Chapter 7 Foreign-Exchange Risk and Forecasting 154
7.1 Foreign-Exchange Risk 154
7.2 Foreign-Exchange Forecasting 161
Summary 169
Chapter 8 Exchange-Rate Determination 171
8.1 Exchange-Rate Determination—A Free Market 171
8.2 Prices and Exchange Rates；Purchasing Power Parity 192
8.3 The Asset Approach 203
8.4 Equilibrium Approach 208
Summary 209
Chapter 9 Import and Export Financing 212
9.1 Institutions 212
9.2 Financing International Trade 214
9.3 Nontraditional Trade Finance 218
9.4 An Example of Trade Financing 221
Summary 222
Chapter 10 Financial Management of the Multinational Enterprises 224
10.1 Portfolio Diversification 224
10.2 Transfer Price 227
10.3 Home Bias in International Investment 230
10.4 International Investment Opportunities 231
10.5 Direct Foreign Investment 232
10.6 Capital Flight 234
10.7 Capital Inflow Issues 235
10.8 Capital Budgeting 235
Summary 237
Chapter 11 International Banking：Reserves,Debt,and Risk 239
11.1 Nature of International Reserves 239
11.2 International Lending Crisis 253
Summary 268
Chapter 12 Macroeconomic Policy in the Open Economy 270
12.1 Economic Objectives of Nations 270
12.2 Policy Instruments 271
12.3 Policy Effects 273
12.4 Internal and External Macroeconomic Equilibrium 280
12.5 Monetary Policy under Fixed Exchange Rates 285
12.6 Fiscal Policy under Fixed Exchange Rates 286
12.7 Monetary Policy under Floating Exchange Rates 287
12.8 Fiscal Policy under Floating Exchange Rates 289
12.9 International Policy Coordination 289
Summary 293
References 296