Description: The subject of this book is the kind of economic interaction and interdependence that has arisen amongst nations in the contemporary world economy, the nature and significance of the pattern of trade balances that have resulted from them, and the question of what, if anything, should be done by national governments about that pattern. The need for international coordination of economic policies is also investigated. The book opens with an article by Edmund S. Phelps who introduces the theme and presents, in summary, the most relevant conclusions that can be assumed from the works as a whole. This is followed by an important essay by Robert Mundell who presents the historical and theoretical perspectives for the entire volume. The essays that follow are then organized into three specific sections. The first concentrates on single countries' economic policies and their effects, in terms of balances and imbalances in their foreign accounts. In the second section, various contributions regarding economic interdependence are reviewed both in terms of techniques for measuring interdependence levels and of applied analysis, of their impact on the various countries' balance of payments. Finally, relations between markets, monetary and fiscal policies on one hand, and the problem of interdependence and the ever-growing need for international coordination of economic policy on the other, are analysed.

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