the international economy comprises sovereign nations, each free to choose its own economics policies. unfortunately, in an integrate world economy one country's economics policies usually affect other countries as well. for example, when germany's bundesbank raised interest rate in 1990 - a step it took to control the possible inflationary impact of the western europe. differences in goals, they may suffer losses if they fail to coordinate their policies. a fundamental problem in international economics is how to produce an acceptable degree of harmony among the tell countries what to do.