MONETARY POLICIES AND INTERNATIONAL ECONOMIC GROWTH

NATIONAL MONETARY POLICIES AND INTERNATIONAL ECONOMIC GROWTH

National economies around the world are more dependent on one another than at any time in the past. The increasing globalization of the economic sphere of life has ushered in a period wherein monetary policies implemented by a major industrial power affect not only the national economy of that specific country, but also affect the level and character of economic activity in all other countries. For almost three years, economic activity has been stagnant in the world's largest industrial economies. For the most part, the industrial countries have not acted in unison to develop and implement monetary policies to deal with the situation. Rather, the separate countries have developed and implemented monetary policy on national bases in attempts to deal with their own urgent problems. In the process, these policy interventions have often exerted undesirable pressures on the international economy.

This research examines the character of the monetary policies implemented by the major industrial countries during the 1990s--primarily in 1993, together with the resulting measures of economic activity over the 12-month period November 1992-October 1993. Monetary policies are discussed and measures of economic performance are presented.

Monetary Policies and Economic Performance

A total of six national economies are included in this analysis--Australia, Canada, German

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Industrial + 5.3% + 5.1% + 6.3% + 0.2% Production Unemployment 11.5% 11.0% 11.3% 11.2% Consumer Prices + 1.7% + 2.9% + 0.7% + 1.7% Wages/Earnings + 5.6% + 6.6% - 0.2% - 3.3% [sources: "Economic and Financial Indicators," 6 February 1993, p. 111; 1 May 1993, p. 113; 7 August 1993, p. 91; 30 October 1993, p. 119.] ================================================================= Germany Germany has pursued a monetary policy of that emphasized the control of inflation, relatively high interest rates, and a strong mark, often to the complete dismay of the country's European Community partners. Monetary policy emphasized interest rates and money supply management. Interest rates (as reflected in the prime commercial rate) were stable at 11 percent from November 1992 through February 1993. Interest rates dropped to 10.5 percent in March 1993, to 10.25 percent in April 1993, t

Category: Economics - M