An Answer to All the Financial Issues Behind Globalization

I a recent International Herald Tribune article, Daniel Altman announced that an economist from UC Berkley has in fact developed the solution to developing an international, stable monetary policy. Widely regarded as one of the main problems involved with globalizations, fluctuating monetary policies between countries is exactly the reason that the IMF and World Bank were created in th 1940s. Andrew Rose, the champion of the plan, has stated that "A combination of floating exchange rates and inflation-targeting is a recipe not just for a stable policy within a country... but also for a stable global monetary system." Interestingly enough, this a reversal of the original basis of the IMF. Where the system under the IMF called for a centralization of monetary policy, Rose believes that the complete decentralization of economic interests will prove most beneficial. In the new system, each country would develop its own monetary policy, indicting their own "goals for the size of the money supply, interest rates, and exchange rates." With the IMF removed from the equation, the 'referee' of the system disappears, but Rose believes that each country will keep their exchange rates logical because it is in their own economic best interest.
While the global economy has been moving away from intervention by the IMF, and the decisions made at the Bretton Woods Convention have not been truly effective since the 70s, Rose still proposes an extreme change from our current understanding of the global economy.

For a more indepth discussion of the economics of it all, check out the article
Altman relates Rose's propositions to both country and global economies, making it especially relative to our discussion of the globalization of economies.