Discussion — Lecture 15: Banks and Global Liquidity

This session covers Lecture 15: Banks and Global Liquidity

The lecture uses the context of a 19th-century gold-standard world to introduce the Treynor model to foreign exchange markets. We flesh out the international dimension to what we covered in Lecture 9. Gold parity must hold within that narrow band or you're off the gold standard. FX dealers operate within the outside spread set by the gold points.

We discuss the important differences between internal and external drains, and the discipline that central banks face.

Lecture Notes

Lecture 15 Discussion Thread