ABSTRACT
The growth in the international economy—from one that effectively circumscribed only the advanced, market-based societies to one of global proportions—has been surprising and difficult to manage. Governmental behavior in foreign economic policy is likely to be characterized increasingly by defensive attitudes and actions. The desire to ward off the most perverse consequences of international interdependence will likely predominate over other motivations. Defensive actions will consist largely of attempts by governments to close off their economies to those aspects of interdependence, like integrated international financial markets, that make it more difficult to carry out internal distribution of wealth. Regional associations would in some instances be based on key currencies, or, under other scenarios, would be based on internationally created assets or units of account. The Jamaica agreements to formally modify the basic rules that govern the international monetary system have given rise to several general conclusions, neither of which should be warranted except perhaps in the very short run.
