New Zealand’s Exchange Rate Regime, the Collapse of Bretton Woods,and the Twilight of the Sterling Area

Catherine Schenk and John Singleton
Additional contact information
Catherine Schenk: University of Glasgow
John Singleton: Victoria University of Wellington

No 30, WEF Working Papers from ESRC World Economy and Finance Research Programme, Birkbeck, University of London

Abstract: How did developing countries adapt to the collapse of the Bretton Woods system? Using new archival evidence, we argue that New Zealand offers an interesting case study of decision-making in a small economy dependent on primary production with close economic and political links to two larger partners – Britain and Australia – with divergent domestic policies. After some experimentation, New Zealand adopted an innovative intermediate solution for the exchange rate that aimed to generate stability for primary producers during a period when the direction of trade was diversifying and most currencies were floating. This imaginative policy was not accompanied by comparable changes in reserves management, and until 1975 New Zealand continued to hold the bulk of its reserves in sterling. The article explores the different priorities and institutional constraints affecting the choice of anchor currency and reserve currency in this context.

Date: 2007-10
New Economics Papers: this item is included in nep-cba, nep-his, nep-ifn and nep-mon
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.worldeconomyandfinance.org/working_pape ... per_PDFs/WEF0030.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wef:wpaper:0030

Access Statistics for this paper

More papers in WEF Working Papers from ESRC World Economy and Finance Research Programme, Birkbeck, University of London Contact information at EDIRC.
Bibliographic data for series maintained by Tim Byne ( this e-mail address is bad, please contact ).