The Bretton Woods System: Paradise Lost?

Barry Eichengreen

No 233394, Center for International and Development Economics Research (CIDER) Working Papers from University of California-Berkeley, Department of Economics

Abstract: The Bretton Woods System frequently appears in the scholarly literature as a model for international monetary reform. This paper briefly considers its operation. It argues that the system's principal achievement, the maintenance of stable exchange rates, was product not of the agreement finalized at the Bretton Woods Conference alone but of two exceptional features of the postwar world. One was the limited international mobility of capital. Capital controls provided policymakers room for maneuver; they softened the tradeoff between domestic objectives and defense of the exchange-rate peg. The other was singular scope for growth resulting from postwar reconstruction and catch-up. In these circumstances, countries felt little need to engage in discretionary monetary and fiscal policies that might have undermined the currency peg.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 31
Date: 1994-10
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Citations: View citations in EconPapers (13)

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Working Paper: The Bretton Woods System: Paradise Lost? (1994)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ucbewp:233394

DOI: 10.22004/ag.econ.233394

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