Abstract
This paper examines the transmission effects of U.S. expansionary policies on inflation in the G7 countries under the latter years of the Bretton Woods system. Using quarterly data and structural vector autoregressions, this paper investigates the extent of inflation variability due to U.S. aggregate supply and aggregate demand impulses in major industrial countries. Empirical results show that a sizable proportion of inflation variability in these countries can be attributed to U.S. shocks. A brief discussion follows concerning the breakdown of Bretton Woods and implications for the design and functioning of international monetary arrangements.
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Dibooğlu, S. Inflation under the Bretton Woods system: The spillover effects of U.S. expansionary policies. Atlantic Economic Journal 27, 74–85 (1999). https://doi.org/10.1007/BF02299179
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DOI: https://doi.org/10.1007/BF02299179