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A Retrospective on the Bretton Woods System

Lessons for International Monetary Reform

At the close of the Second World War, when industrialized nations faced serious trade and financial imbalances, delegates from forty-four countries met in Bretton Woods, New Hampshire, in order to reconstruct the international monetary system. In this volume, three generations of scholars and policy makers, some of whom participated in the 1944 conference, consider how the Bretton Woods System contributed to unprecedented economic stability and rapid growth for 25 years and discuss the problems that plagued the system and led to its eventual collapse in 1971.

The contributors explore adjustment, liquidity, and transmission under the System; the way it affected developing countries; and the role of the International Monetary Fund in maintaining a stable rate. The authors examine the reasons for the System’s success and eventual collapse, compare it to subsequent monetary regimes, such as the European Monetary System, and address the possibility of a new fixed exchange rate for today’s world.

690 pages | 116 line drawings, 56 tables | 6 x 9 | © 1993

National Bureau of Economic Research Project Report

Economics and Business: Economics--International and Comparative, Economics--Money and Banking

Table of Contents

Preface, Michael D. Bordo and Barry Eichengreen

I. Overviews and Origins
1 The Bretton Woods International Monetary System: An Historical Overview, Michael D. Bordo
Comments: Rudiger Dornbusch and Richard N. Cooper
2 Bretton Woods and Its Precursors: Rules Versus Discretion in the History of International Monetary Systems, Alberto Giovanni
Comments: Anna J. Schwartz and Charles Wyplosz
3 The Political Origins of Bretton Woods, G. John Ikenberry
Comments: John S. Odell and L. S. Pressnell
II. Bretton Woods in Operation
4 The Adjustment Mechanism, Maurice Obstfeld
Comments: Robert Z. Aliber and Vittorio U. Grilli
5 The Provision of Liquidity in the Bretton Woods System, Hans Genberg and Alexander K. Swoboda
Comments: Stanley W. Black and John Williamson
6 International Transmission under Bretton Woods, Alan C. Stockman
Comments: Toru Iwami and Bennett T. McCallum
7 The Role of International Organizations in the Bretton Woods System, Kathryn M. Dominguez
Comments: Alberto Alesina and William H. Branson
8 Devaluation Controversies in the Developing Countries: Lessons from the Bretton Woods Era, Sebastian Edwards (Jointly with) Julie A. Santaella
Comments: Stanley Fischer and Albert Fishlow
9 The Collapse of the Bretton Woods Fixed Exchange Rate System, Peter M. Garber
Comment: Willem H. Buiter
10 Panel Session I: Retrospectives, Michael Mussa, Chair; Edward M. Bernstein, W. Max Corden, and Robert Solomon
III. The Legacy of Bretton Woods
11 Interest Differentials under Bretton Woods and the Post-Bretton Woods Float: The Effects of Capital Controls and Exchange Risk, Richard C. Marston
Comments: Paul Krugman and Allan H. Meltzer
12 Attitudes towards Inflation and the Viability of Fixed Exchange Rates: Evidence from the EMS, Susan M. Collins and Francesco Giavazzi
Comments: Michele Fratianni and Niels Thygesen
13 Panel Session II: Implications for International Monetary Reform, Barry Eichengreen, Chair; C. Fren Bergsten, Stanley Fischer, Ronald I. McKinnon, Robert Mundell, and Martin S. Feldstein
IV. Conclusion
14 Epilogue: Three Perspectives on the Bretton Woods System, Barry Eichengreen

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