In an outstanding account of exchange rates in the international monetary system, W. Max Corden considers the essential issues in international macroeconomics. The author takes as his model the macroeconomic situation of a country with an open economy, and explains the effects of domestic fiscal and monetary macroeconomic policy on exchange rates. He clearly analyses the choices faced by governments attempting to manage both the domestic inflation rate and the external exchange rate and current account balance. Professor Corden then discusses the European Exchange Rate mechanism, and provides a sceptical analysis of the possibilities for monetary union in Europe, and for international policy coordination in general. He gives equal weight to discussion of the present U.S.-centred international monetary system outside the E.R.M., and combines theoretical models with an account of the actual determination of floating exchange rates. Although the book itself is orientated towards monetary rather than trade issues, the author discusses two topical issues: the role of protectionist policies, and the idea of competitiveness. Finally, he looks at the future of the international monetary system and the series of current reform proposals. Students will find this book useful because the author covers essential issues lucidly and authoritatively. The exposition is entirely non-mathematical. Postgraduate students and academics will be interested since Corden is a distinguished writer on international trade and policy, and his arguments are powerfully presented. New to this edition: This is a revised and expanded edition of a previous book by Corden, Inflation, Exchange Rates and the World Economy, the third edition of which was published in 1985. In this new book, Professor Corden has fully rewritten the text, but retains the discursive, informal, reader-friendly style of the earlier editions. In this new edition, Professor Corde