Law and International Monetary Policy Regimes

This chapter assesses one aspect of the large political economy of multi-country policy interventions, that which works through the money markets, liquidity, price controls, and overall macroeconomic policy. This is an important area of research and policy activism involving important multilateral organizations, like the International Monetary Fund and the Bank of International Settlements. There have been debates about exchange-rate policies (which by definition, have effects on other countries), about capital controls (which may block money from entering one nation but also blocks the movement of money from other countries), and price controls (which is often treated as a no-go area). Capital controls and interventions in the price system have also been politically divisive topics. The creation of the European Union helped stimulate these debates, since there were immediate policy spillovers that directly affected human well-being, from Britain and Germany to Greece and Ireland. The chapter then puts forward some radical proposals with special commentary on the European Union.