- •Introduction
- •Implications for Business
- •The Tragedy of the Congo (Zaire)
- •Introduction
- •The Gold Standard
- •Nature of the Gold Standard
- •The Strength of the Gold Standard
- •The Period between the Wars, 1918-1939
- •The Bretton Woods System
- •Flexibility
- •The Role of the World Bank
- •The Collapse of the Fixed Exchange Rate System
- •Exchange Rates since 1973
- •Figure 10.1
- •Speculation
- •Uncertainty
- •Who Is Right?
- •Exchange Rate Regimes in Practice
- •Pegged Exchange Rates and Currency Boards
- •Figure 10.2
- •Target Zones: The European Monetary System
- •Performance of the System
- •Recent Activities and the Future of the imf
- •Financial Crises in the Post-Bretton Woods Era
- •Third World Debt Crisis
- •Figure 10.3
- •Mexican Currency Crisis of 1995
- •The Asian Crisis
- •The Investment Boom
- •Excess Capacity
- •The Debt Bomb
- •Expanding Imports
- •The Crisis
- •Evaluating the imf's Policy Prescriptions
- •Implications for Business
- •Currency Management
- •Business Strategy
- •Corporate - Government Relations
- •Chapter Summary
- •Critical Discussion Questions
- •Case Discussion Questions
Case Discussion Questions
To what extent is the competitive position of Caterpillar against Komatsu dependent on the dollar/yen exchange rate? Between mid-1996 and early 1998, the dollar appreciated by over 40 percent against the yen. How do you think this would have affected the relatively competitive position of Caterpillar and Komatsu?
If you were the CEO of Caterpillar, what actions would you take now to make sure there is no repeat of the early 1980s experience?
What potential impact can the actions of the IMF and World Bank have on Caterpillar's business? Is there anything Cat can do to influence the actions of the IMF and World Bank?
As the CEO of Caterpillar, would you prefer a fixed exchange rate regime or a continuation of the current managed-float regime? Why?