Global Imbalances and the Lessons of Bretton Woods

Business & Finance, Economics, Economic History
Cover of the book Global Imbalances and the Lessons of Bretton Woods by Barry Eichengreen, The MIT Press
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
Author: Barry Eichengreen ISBN: 9780262262637
Publisher: The MIT Press Publication: January 22, 2010
Imprint: The MIT Press Language: English
Author: Barry Eichengreen
ISBN: 9780262262637
Publisher: The MIT Press
Publication: January 22, 2010
Imprint: The MIT Press
Language: English

Why the current Bretton Woods-like international financial system, featuring large current account deficits in the center country, the United States, and massive reserve accumulation by the periphery, is not sustainable.

In Global Imbalances and the Lessons of Bretton Woods, Barry Eichengreen takes issue with the argument that today's international financial system is largely analogous to the Bretton Woods System of the period 1958 to 1973. Then, as now, it has been argued, the United States ran balance of payment deficits, provided international reserves to other countries, and acted as export market of last resort for the rest of the world. Then, as now, the story continues, other countries were reluctant to revalue their currencies for fear of seeing their export-led growth slow and suffering capital losses on their foreign reserves. Eichengreen argues in response that the power of historical analogy lies not just in finding parallels but in highlighting differences, and he finds important differences in the structure of the world economy today. Such differences, he concludes, mean that the current constellation of exchange rates and payments imbalances is unlikely to last as long as the original Bretton Woods System.

Two of the most salient differences are the twin deficits and low savings rate of the United States, which do not augur well for the sustainability of the country's international position. Such differences, he concludes, mean that the current constellation of exchange rates and payments imbalances is unlikely to last as long as the original Bretton Woods System. After identifying these differences, Eichengreen looks in detail at the Gold Pool, the mechanism through which European central banks sought to support the dollar in the 1960s. He shows that the Pool was fragile and short lived, which does not bode well for collective efforts on the part of Asian central banks to restrain reserve diversification and support the dollar today. He studies Japan's exit from its dollar peg in 1971, drawing lessons for China's transition to greater exchange rate flexibility. And he considers the history of reserve currency competition, asking if it has lessons for whether the dollar is destined to lose its standing as preeminent international currency to the euro or even the Chinese renminbi.

View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart

Why the current Bretton Woods-like international financial system, featuring large current account deficits in the center country, the United States, and massive reserve accumulation by the periphery, is not sustainable.

In Global Imbalances and the Lessons of Bretton Woods, Barry Eichengreen takes issue with the argument that today's international financial system is largely analogous to the Bretton Woods System of the period 1958 to 1973. Then, as now, it has been argued, the United States ran balance of payment deficits, provided international reserves to other countries, and acted as export market of last resort for the rest of the world. Then, as now, the story continues, other countries were reluctant to revalue their currencies for fear of seeing their export-led growth slow and suffering capital losses on their foreign reserves. Eichengreen argues in response that the power of historical analogy lies not just in finding parallels but in highlighting differences, and he finds important differences in the structure of the world economy today. Such differences, he concludes, mean that the current constellation of exchange rates and payments imbalances is unlikely to last as long as the original Bretton Woods System.

Two of the most salient differences are the twin deficits and low savings rate of the United States, which do not augur well for the sustainability of the country's international position. Such differences, he concludes, mean that the current constellation of exchange rates and payments imbalances is unlikely to last as long as the original Bretton Woods System. After identifying these differences, Eichengreen looks in detail at the Gold Pool, the mechanism through which European central banks sought to support the dollar in the 1960s. He shows that the Pool was fragile and short lived, which does not bode well for collective efforts on the part of Asian central banks to restrain reserve diversification and support the dollar today. He studies Japan's exit from its dollar peg in 1971, drawing lessons for China's transition to greater exchange rate flexibility. And he considers the history of reserve currency competition, asking if it has lessons for whether the dollar is destined to lose its standing as preeminent international currency to the euro or even the Chinese renminbi.

More books from The MIT Press

Cover of the book The War on Learning by Barry Eichengreen
Cover of the book The Language of New Media by Barry Eichengreen
Cover of the book Blowout in the Gulf by Barry Eichengreen
Cover of the book The Empire of Value by Barry Eichengreen
Cover of the book Aluminum Dreams by Barry Eichengreen
Cover of the book Blue and Green by Barry Eichengreen
Cover of the book The Embodied Mind by Barry Eichengreen
Cover of the book Titans of the Climate by Barry Eichengreen
Cover of the book Translating Happiness by Barry Eichengreen
Cover of the book Who Wins in a Digital World? by Barry Eichengreen
Cover of the book Aesthetics Equals Politics by Barry Eichengreen
Cover of the book Technologies of Vision by Barry Eichengreen
Cover of the book The Greenest Nation? by Barry Eichengreen
Cover of the book Radical, Religious, and Violent by Barry Eichengreen
Cover of the book The Subject's Matter by Barry Eichengreen
We use our own "cookies" and third party cookies to improve services and to see statistical information. By using this website, you agree to our Privacy Policy