Contents -- 1 In Search of International Money: The Convertible Currency System -- Convertibility and Commercial Trading: Official Restraints on Asset Choice -- The Interbank Market for Convertible Currencies -- The Monetary Conditions for Long-Run Exchange Stability -- Technical Note: Foreign Exchange Quotations -- 2 Intervention by Central Banks In A World of N Currencies -- N Currencies and N - 1 Exchange Rates -- Official Parities and Triangular Arbitrage -- The Choice of the Nth Currency -- The United States Dollar as a Vehicle Currency for Commercial Banks -- Inconvertibility, Less Developed Countries, and Pegged Exchange Rates -- Fixed versus Floating Exchange Rates -- 3 Currency Inconvertibility and the Foreign Trade of Centrally Planned Economies -- Central Planning and Commodity Inconvertibility -- Multilateral Exchange with the West -- Bilateralism within the Council for Mutual Economic Assistance (CMEA) -- The Determination of Foreign Trade Prices in the CMEA -- Barter, Command Planning, and Economic Sovereignty -- A Gold Ruble? -- Full Liberalization and the Monetary Conditions for Exchange-Rate Stability -- 4 Hedging by Exporters and Importers -- The Currency of Invoice: Tradables I and II -- Currency Risk and the Structure of Trade Credit -- Inventory Valuation Adjustment versus Forward Covering -- Financial Predominance, Tradables II, and the Optimum Double Hedge -- Technical Note: Optimum Forward Cover -- 5 Forward Covering and Interest Arbitrage in Imperfect Capital Markets -- The Trader's Liquidity and Spot versus Forward Covering -- The Empirical Magnitude of Forward Transacting -- Hedging Pressure and Bias in the Forward Exchange Rate -- The Importance of Covered Interest Arbitrage -- Forward Market Equilibrium and Interest-Rate Parity -- Imperfections in the Supply of Arbitrage Funds.

Short-Term Capital Flows and the Public Interest -- Technical Note: Covered Interest Arbitrage -- 6 Purchasing Power Parity -- The Law of One Price and the Absolute Version of Purchasing Power Parity -- Relative Purchasing Power Parity and the "Real" Exchange Rate -- Some Bilateral Statistical Comparisons -- Multilateral Comparisons of Effective Exchange Rates and Prices -- Deviations from the Law of One Price under Fluctuating Exchange Rates -- Implications for Trader Hedging -- Per Capita Income Comparisons and Exchange-Rate Conversions -- 7 Speculation -- Part I: Floating Exchange Rates among Convertible Currencies -- On Aggregating Open Positions over All Maturities -- The Demand for Stabilizing Speculation and the "J" Curve -- The Supply of Stabilizing Speculation -- Banking Risk versus Currency Risk -- Multinational Corporations and Other Nonspeculators -- Speculating without International Money -- Part II: Pegged Exchange Rates and Speculation against Central Banks -- Leads and Lags -- Changing the Currency of Invoice -- Official Speculation and Exchange Controls -- 8 Fluctuating Exchange Rates, 1973-1978: A Qualified Monetary Interpretation -- Keynesian Liquidity Preference and the Rate of Interest in an Open Economy -- Foreign Exchange Dealers and the Domestic Money Market -- The Interest Elasticity of the Liquidity-Preference Function -- Exchange-Rate Fluctuations under Full Information -- Uncertain Expectations -- Optimum Currency Areas -- Intervention by Central Banks: A Concluding Note -- 9 The Eurocurrency Market -- Regulatory Asymmetry: A Potted History -- The Mechanics of Transacting and the Scope of the Market -- Problems of Statistical Measurement: Some Conceptual Difficulties -- The Foreign Exchange Aspect: Covering and Interest Arbitrage -- Liquidity Creation and Domestic Financial Intermediation -- International Capital Transfers.

A Concluding Note on Regulation -- 10 Monetary Unions and Fixed Exchange Rates -- Secular Growth in the Money Supply and the Prices of Tradable Goods -- Official Intervention and Nonsterilization -- The Symmetry Rule and the Aggregate Monetary Base -- On Flexing the System: Discounting and Short-Term Capital Flows -- Concluding Note -- 11 America's Role in Stabilizing the World's Monetary System -- The Marshall Plan and the Remonetization of Western European Trade (1948-1959) -- Realization of the Bretton Woods Agreement and the Dollar-Gold Exchange Standard (1959-1968) -- Uncertainly Pegged Exchange Rates and the International Transmission of Inflation (1968-1973) -- Freely Floating Exchange Rates (1973-Present) -- Appendix: Proposals for International Monetary Reform -- On Extending Currency Convertibility to Less Developed and Centrally Planned Economies -- A Commodity-Reserve Currency? -- Artificial Currency Units and Special Drawing Rights -- The Seigniorage Problem and the Link to Less Developed Countries -- Name Index -- A -- B -- C -- D -- E -- F -- G -- H -- I -- J -- K -- L -- M -- N -- O -- P -- R -- S -- T -- W -- Y.