Monetary Interdependence among Major European Countries

Abstract

Two problems of the international monetary system have received widespread attention in the literature during the last decade. They are first the potential instability of the Bretton Woods system, which revealed itself at the end of the sixties and, second, the low efficacy of national monetary policies in an interdependent world.

This study is based on my doctoral dissertation submitted in October 1973 to the Johns Hopkins University. A revised version was published in 1976-see De Grauwe (1976). I would like to acknowledge the stimulating comments and criticisms of my thesis committee chairman Professor Jurg Niehans and of Professor Bela Balassa. This paper also benefited from many helpful comments of Professor Carl Christ, Professor Ronald McKinnon, Hans Gerhard, John Hewson, Eisuke Sakakibara and Herman Verwilst.