ABSTRACT
Discussion of the external impacts of the United States' financial policies is of interest for several reasons. Although the United States' GNP is today a considerably smaller fraction of non-communist world's GNP than it was in the 1950s and 1960s, it remains by far the largest single national product in the system. Moreover, despite the lower GNP share of the US, the influence of the United States upon the global conjuncture has generally been perceived as larger in the past 15 years than in the previous 20 years. The most important single reason for this perception is the international integration of credit markets, which, since the early 1970s, has greatly magnified the global impact of US monetary conditions in particular. It is true that the principal exchange rates in the system have floated during this period, ostensibly allowing monetary trends in different currency areas to diverge. However, so far as large countries are concerned, the scope for such divergence is limited in practice.
