Written by Robert Mundell's academic descendants, as well as other leading economists and scholars, the essays in this volume reflect Mundell's broad influence on modern open-economy macroeconomics. The topics include the vicissitudes of gold in the international system, choice of exchange rate regime, post-World War II European monetary reform, banking crises in emerging markets, speculative attacks on fixed exchange rates, monetary policy rules, interactions between economists and policy makers over macrostabilization and structural microeconomic issues, the connection between international factor mobility and trade, the Mundell-Fleming open-economy macro model, the quantitative implications of general-equilibrium sticky price models, the international roles of the euro and yen, and the employment effects of import tariffs. Table of Contents Contributors vii Acknowledgments ix Nobel Prize Background Survey xi Introduction 1 1 The International Effects of Monetary and Fiscal Policy in a Two-Country Model Caroline Betts and Michael B. Devereux 9 2 The Rise and Fall of a Barbarous Relic: The Role of Gold in the International Monetary System Michael D. Bordo and Barry Eichengreen 53 3 Fostering Financial Stability: A New Case for Flexible Exchange Rates Roberto Chang and Andres Velasco 123 4 Curing a Monetary Overhang: Historical Lessons Rudiger Dornbusch and Holger C. Wolf 143 5 Staying Afloat When the Wind Shifts: External Factors and Emerging-Market Banking Crises Barry Eichengreen and Andrew K. Rose 171 6 Perspectives on the Recent Currency Crisis Literature Robert P. Flood and Nancy P. Marion 207 7 Progress in the Theory of Economic Policy Francesco Giavazzi and Alberto Giovannini 251 8 International Trade and Factor Mobility: An Empirical Investigation Linda S. Goldberg and Michael W. Klein 273 9 Saving, Investment, and Gold: A Reassessment of Historical Current Account Data Matthew T. Jones and Maurice Obstfeld 303 10 Globalization and the Consequences of International Fragmentation Ronald W. Jones and Henryk Kierzkowski 365 11 Money Shocks and the Current Account Philip R. Lane 385 12 Euroland and East Asia in a Dollar-Based International Monetary System: Mundell Revisited Ronald I. McKinnon 413 13 The Business Cycle of Balance-of-Payments Crises: A Revision of a Mundellian Framework Enrique G. Mendoza and Martin Uribe 431 14 Tariffs, Unemployment, and the Current Account: An Intertemporal Equilibrium Model Shouyong Shi 467 15 The Policy Rule Mix: A Macroeconomic Policy Evaluation John B. Taylor 505 Index 519