The subject of this book is the kind of economic interaction and interdependence that has arisen among 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.

Preface - Introduction and Major Conclusions; E.S.Phelps - Trade Balance Patterns as Global General Equilibrium: The Seventeenth Approach to the Balance of Payments; R.Mundell - PART 1: DOMESTIC ECONOMIC POLICY AND TRADE BALANCE - The Real Exchange Rate Under Alternative Nominal Exchange Rate Regimes; E-M.Claassen - The Economic Effects of Expected Fiscal Policy in Small Open Economies; J.Schr der - The 'Pass-Through Puzzle': The Missing Prince from Hamlet; J.N.Bhagwati - PART 2: INTERDEPENDENCE BETWEEN AREAS AND BALANCES OF PAYMENTS - International Economic Interdependence and Trade Balances; L.Paganetto - A Framework to Develop Measures of Interdependence and Protectionism; P.L.Scandizzo - North-North and North-South Debt Crises and the Role of Trade Adjustments; P.C.Padoan - Latin-American Debt, US Role in the Transmission of North-South Linkages and World Trade; C.W.Reynolds - The Unified European Market and Trade with Latin America: Emargination or Development?; M.Bagella - PART 3: MARKETS, MONETARY AND FISCAL POLICY, INTERDEPENDENCE AND INTERNATIONAL COORDINATION OF ECONOMIC POLICIES - Exchange-Rate Regimes and the Desirability of International Cooperation; C.Carraro & F.Giavazzi - Prices and Exchange Rates: What Theory Needs to Explain; A.Giovannini - International Economic Coordination from Bretton Woods to the G5/G7 Meetings of the 80s; A.Colombo - International Economic Interdependence and World Income Distribution; G.Palmerio - Evaluation or Actual Mechanisms Worked for External Adjustments, 1985-1988; M.Yoshitomi - Cooperation in Managing the Dollar, 1985-1987: Interventions in Foreign Exchange Markets and Interest Rates; E.Gaiotti, P.Giucca & S.Micossi - EMS Membership under Real Exchange Rate Appreciation: Recent Trends in Italian Trade; R.de Luzenberger & C.Imbriani - Deficit and Surplus Forever?; S.Marris - Index