Suchergebnisse

The U.S. economy has been and continues to be more open to foreign direct investment than any economy in the world. National policy is one of complete neutrality, but when state and local incentives are considered, the overall stance may be one of encouragement. At the national level, potential foreign investments are scrutinized only vis-à-vis their threat to national security, and very few are subjected to even this examination. Monitoring foreign direct investment is now done but is not done well. Improvements in data gathering are possible and recently have been considered more seriously. More prominent recent issues in the control of foreign direct investment seem to concern infiltration of the political system, specific nationalities, and the purchases of landmark properties. In spite of discussion and legislative proposals, there is little enlightened opinion that restrictions on foreign direct investment in the United States should increase. As long as the nation-state continues to be the predominant form of world political organization, however, there will always be at least some potential—if only nominal—barriers on national security grounds.

THE U.S. ECONOMY HAS BEEN AND CONTINUES TO BE MORE OPEN TO FOREIGN DIRECT INVESTMENT (FDI) THAN ANY OTHER ECONOMY IN THE WORLD. ALTHOUGH NATIONAL GOVERNMENT POLICY IS COMPLETELY NEUTRAL, THE OVERALL STANCE MAY BE ONE OF ENCOURAGEMENT WHEN STATE AND LOCAL GOVERNMENT INCENTIVES ARE CONSIDERED. AT THE NATIONAL LEVEL, SOME POTENTIAL FOREIGN INVESTMENTS ARE SCRUTINIZED VIS-A-VIS THEIR THREAT TO NATIONAL SECURITY, BUT VERY FEW ARE SUBJECTED TO EVEN THIS EXAMINATION. IMPROVEMENTS IN DATA-GATHERING ON FDI ARE POSSIBLE AND RECENTLY HAVE BEEN CONSIDERED MORE SERIOUSLY BY SOME AMERICANS. MORE PROMINENT ISSUES IN THE CONTROL OF FDI CONCERN INFILTRATION OF THE POLITICAL SYSTEM, SPECIFIC NATIONALITIES, AND THE PURCHASES OF LANDMARK PROPERTIES. DESPITE MUCH DISCUSSION AND SOME LEGISLATIVE PROPOSALS, THERE IS LITTLE ENLIGHTENED OPINION THAT RESTRICTIONS ON FDI IN THE USA ARE NEEDED. HOWEVER, AS LONG AS THE NATION-STATE CONTINUES TO BE THE PREDOMINANT FORM OF WORLD POLITICAL ORGANIZATION, THERE WILL ALWAYS BE SOME POTENTIAL--IF ONLY NOMINAL--BARRIERS TO FDI ON NATIONAL SECURITY GROUNDS.

Monetary targets have been instituted in major countries for nearly a decade. There has been a rather wide variety of experience with them, both in the control procedures and in the success with which targets have been achieved. This paper presents results of a reaction function investigation into the extent to which elements of discretionary monetary policy remained even under targeting. Generally, targets probably were successful in focusing central bank attention on the long run. But a conclusion here is that distinguishable elements of discretion (as opposed to rule), evidenced by movements in targeted aggregates themselves, were present for several countries, including the United States.

At the close of nearly a decade of managed floating exchange rates, the U.S. dollar remains the world's primary international reserve asset and vehicle currency. Some underlying macroeconomic characteristics of the United States as the major reserve currency country have undergone a marginal diminution relative to other emerging reserve centers, and noticeable currency diversification of private and official international liquidity has taken place. The underlying microfoundations of dollar financial markets remain dominant, however, and continue to underpin the U.S. currency in its reserve role. In spite of efforts to introduce officially sponsored multiple currency units, such as the International Monetary Fund's Special Drawing Right, into a larger role, these currency composites have met with only limited success to date. One must look primarily to private markets for the future evolution of the international financial system, and on this basis it is likely that the dollar will remain most important. The decade of the 1970s also witnessed a trend toward privatization of international financial markets in general, at the expense of the role formerly played by official lending agencies. This environment also will likely reinforce the role of market forces in determining the future course of the world monetary system.

A number of writers have argued in recent years that massive international currency substitution has been a major cause of exchange rate volatility and monetary instability in the United States and other major countries. Such analysis is frequently coupled with recommendations for a return to pegged exchange rates. This paper critically examines the evidence presented for this currency substitution view. It argues that the weight of latest research suggests that direct international currency substitution has not been of major quantitative importance for the U.S. However, empirical evidence supports traditional views that international capital mobility can generate substantial short‐run monetary interdependence even under flexible exchange rates. Thus, even though international currency substitution is of little importance to U.S. monetary conditions, a broader range of international considerations may be of considerable importance for the U.S. economy.