The International Monetary System: Should it be Reconsidered?

Jacob A. Frenkel

No 2163, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper addresses the question of reform of the international monetary system. It starts by identifying the sources of disenchantment with the performance of the present regime of floating exchange rates and by outlining the reasons for the lack of convergence of views about the characteristics of the desired system. A central theme in the discussion is that a reform of the monetary system without a fundamental change in macroeconomic policies may be harmful. The analysis proceeds by examining the broader issues and principles relevant for an evaluation of reform. The key questions are: what should be reformed, what are the costs of reform and when should the reform occur. In this context special attention is given to the "target-zones" proposal for exchange rate management. The paper concludes with the observation that a reform of the system should not be viewed as an instrument for crisis management dominated by short-term considerations, but rather should be guided by long-term perspective. It is argued that if the root cause of the current economic difficulties is fiscal imbalances in the world economy, then a drastic reform of the international monetary system (if one is needed) might better wait until nations restore a more sustainable course of fiscal management.

Date: 1987-02
Note: ITI IFM
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Published as Frenkel, Jacob A. "The International Monetary System: Should It Be Reformed?" American Economic Review, Vol. 77, No. 2, (May 1987), pp. 205-210.

Downloads: (external link)
http://www.nber.org/papers/w2163.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:nbr:nberwo:2163

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w2163

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().