These are the study questions for you to think about Mundell's paper.

I'm sorry, it seems I forgot to upload the reading for Lecture 14. It contrasts with this week's reading from Kindleberger.

This piece is meant mainly to set the scene for our discussion of foreign exchange, in the same way that the Allyn Young piece set the scene for Part One. Note the importance that Mundell places on the price of gold--is he a metallist? He also uses the language of discipline and elasticity--is his view compatible with the money view? Note p. 333 his emphasis on US deficit as the source of world reserves, and compare with the Kindleberger reading below.

This week's reading is this very same paper I cited earlier. There are no study questions.

This reading contrasts with Mundell, and much of the contemporary economic debate, by taking a banking view of international money and balance of payments. According to Kindleberger, the US should be understood as bank of the world, borrowing short-term and lending long-term, thus providing both liquid assets and long term capital funding. The US is different from other countries insofar as the dollar is the world reserve currency and dollar money markets are the world funding markets. Thus the Eurodollar rate is actually the world rate of interest. Kindleberger worries about misguided attempts to "correct" deficits since they may wind up inhibiting the free flow of capital on which world growth depends.