Abstract
The Bretton Woods system of fixed exchange rates was abandoned at the beginning of March 1973 when currencies were allowed to float. Has the system of flexible exchange rates fulfilled the expectations placed in it? How should experiences with regional systems of fixed exchange rates be assessed, and what are the prospects for a return to such a system worldwide?
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References
A vivid description of the events leading up to floating is to be found in H. van der Wee: Der gebremste Wohistand, Munich 1984, pp. 534 ff.
For considerations along these lines, see for example: Bank for International Settlements: Forty-fourth Annual Report, Basle, 10th June 1974, pp. 32 ff.
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A survey of developments is to be found in L. S. Copeland: Exchange Rates and International Finance, Workingham 1989, pp. 32 ff.
This situation spawned numerous investigations and studies that attempted to find a fundamental solution to the problem. See for example Y. Ishiyama: International Monetary Reform in the 1990s: Issues and Prospects, Hamburg 1990.
See also B. Reszat: Zwischen Kooperation und Konflikt: Japans Stellung in der G-Z, in M. Pohl (ed.): Japan 1991/92, Hamburg 1992, pp. 190–210.
For a detalled analysis of the causes, see U. Dennig-DeLuro-Tellmarkte, Hamburg 1987,
The so-called Jurgensen Report reached an extremely pessimistic conclusion. When the G-7 countries proclaimed a common Strategy for the dollar in the Plaza Agreement in 1985 and re-affirmed it in the Louvre Agreement in 1987, many observers assessed the situation much more favourably. In this regard, see also R. C. Henning: Macroeconomic Diplomacy in the 1980s, London 1987, or Y. Funabashi: Managing the Dollar: From the Plaza to the Louvre, Washington, D.C. 1988.
See for example M. Willms: Internationale Währungspolitik, Munich 1992, p. 151.
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See also J. Kaehler: Statistische Modelle für den DM-Dollar-Wechselkurs, in: H. Kräger (ed.): Empirische Wirtschaftsforschung, Frankfurt 1988, pp. 131–173, and the literature cited there.
See also B. Reszat Cycles, Chaos and Exchange Rates, in: Pennsylvania Economic Review, forthooming, and the literature cited there.
See for example J. Niehans: Monetary and Fiscal Policies in Open Economies under Fixed Exchange Rates: An Optimizing Approach, in: Journal of Political Economy, Vol. 76, No. 4, 1968, pp. 893–920; K. Hamada: Alternative Exchange Rate Systems and the Interdependence of Monetary Policies, in: R. Z. Allber (ed.): National Monetary Polices and the International Financial System, Chicago 1974, pp. 13–33, and with regard to more recent works and for a critique of these approaches in general, B. Reszat: Spiele ohne Sieger, in: W. Filc and C. Köhler (eds.): Kooperation, Autonomie und Devisenmarkt, Berlin 1990, pp. 49–65.
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For a detailed exposition of the reasons, see R. Hasse: Die Europäische Zentralbank: Perspektiven für eine Weiterentwicklung des Europäischen Währungssystems, Gütersloh 1989.
Discussion centres at present on the prospects for a yen block in Asia, similar to the EMS “DM bloc” in Europe. See also J. A. Frankel: Is a Yen Bloc Forming in Pacific Asia?, in: R. O'Brien (ed.): Finance and the International Economy, Oxford 1991.
For a detailed treatment, see B. Reszat: Strategic Impediments to Currency Unification, in: D. E. Fair, R. J. Raymond (eds.): The New Europe: Evolving Economic and Financial Systems in East and West, Dordrecht 1993, pp. 281–293.
See R. McKinnon: An International Standard for Monetary stabilization, Washington, D.C., 1984; and M. Miller, J. Williamson: Targets and Indicators: A Blueprint for the International Coordination of Economic Policy, Washington, D.C., 1987.
Even within the EMS the central banks usually intervene well before currencies reach their intervention points, as they fear they will fail if they wait until that stage. See for example “Europäische Politiker diskutieren über Anpassungen der EWS-Regeln”, in: Frankfurter Allgemeine Zeitung, 25th January 1993.
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Reszat, B. Twenty years of flexible exchange rates: Experiences and developments. Intereconomics 28, 107–110 (1993). https://doi.org/10.1007/BF02928113
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DOI: https://doi.org/10.1007/BF02928113