Hostname: page-component-586b7cd67f-g8jcs Total loading time: 0 Render date: 2024-11-28T15:01:47.610Z Has data issue: false hasContentIssue false
  • English
  • Français

DOCTRINAL DEVELOPMENTS IN INTERNATIONAL MONEY: THE QUESTION OF CURRENCY INTERNATIONALIZATION FROM BRETTON WOODS TO THE 1970S

Published online by Cambridge University Press:  02 October 2017

Anthony M. Endres
Anthony M. Endres*
Affiliation:
Department of Economics, University of Auckland, Private Mail Bag 92019, Auckland, New Zealand. [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

In the Bretton Woods era the controversy over cross-border use of national monies turned on how to create ‘symmetries’ and avoid significant ‘asymmetries’ in the way national currencies shared specific international currency functions. We examine the twentieth-century work of prominent economists on the nature, choice, and functions of international currencies. Prescriptive approaches to international currency formation are considered, beginning with the discussion of the Bretton Woods plans, followed by doctrinal developments stimulated by the collapse of the Bretton Woods system. Why are those developments instructive, given recent revisitation of the currency internationalization question in modern international monetary thought and policy? The modern revival of this question resembles a rehabilitation and restatement of earlier controversies, though it underestimates the gradual encroachment of the idea of international currency competition. This idea came to dominate other doctrines from the 1970s; it accommodates the ongoing adaptation of national currencies to the full range of international currency functions.

Type
Articles
Information
Journal of the History of Economic Thought , Volume 39 , Issue 4 , December 2017 , pp. 429 - 451
Copyright
Copyright © The History of Economics Society 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Asso, Pier F., and Fiorito, Luca. 2009. “A Scholar in Action in Interwar America: John H. Williams on Trade Theory and Bretton Woods.” In Leeson, Robert, ed., American Power and Policy. Basingstoke: Palgrave Macmillan, pp. 180–244.CrossRefGoogle Scholar
Black, Stanley W. 1985. “International Money and International Monetary Arrangements.” In Kenen, Peter B. and Jones, Ronald W., eds., Handbook of International Monetary Economics. Volume II. Amsterdam: North Holland, pp. 1154–1193.Google Scholar
Bordo, Michael D. 1993. “The Bretton Woods International Monetary System: History and Overview.” In Bordo, Michael and Eichengreen, Barry, eds., A Retrospective on the Bretton Woods System. Chicago: University of Chicago Press, pp. 3–89.CrossRefGoogle Scholar
Bordo, Michael D., and James, Harold. 2001. “The Adam Klug Memorial Lecture. Haberler versus Nurkse: The Case for Floating Exchange Rates as an Alternative to Bretton Woods?” Working Paper 8545, October. Cambridge, MA: National Bureau of Economic Research.CrossRefGoogle Scholar
Bordo, Michael D., and James, Harold. 2012. “Reserves and Baskets.” Open Economies Review 23: 113–127.CrossRefGoogle Scholar
Cesarano, Filipo. 2006. Monetary Theory and Bretton Woods: The Construction of an International Monetary System. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Cesarano, Filipo. 2007. “The Bretton Woods Agreements: A Monetary Theory Perspective.” In Cottrell, Philip, Notaras, Gerassimos, and Tortella, Gabriel, eds., From the Athenian Tetradrachm to the Euro: Studies in European Monetary Integration. London: Ashgate, pp. 113–135.Google Scholar
Chrystal, K. Alec. 1978. International Money and the Future of the SDR. Essays in International Finance, no. 128 (June). Princeton, NJ: International Finance Section, Princeton University.Google Scholar
Cohen, Benjamin J. 1971. The Future of Sterling as an International Currency. London: Macmillan.Google Scholar
Cohen, Benjamin J. 1998. The Geography of Money. Ithaca: Cornell University Press.Google Scholar
Connell, Carol. 2013. Reform of the World Monetary System: Fritz Machlup and the Bellagio Group. London: Pickering and Chatto.Google Scholar
Cooper, Richard N. 1972. “Eurodollars, Reserve Dollars, and Asymmetries in the International Monetary System.” Journal of International Economics 2: 325–344.CrossRefGoogle Scholar
Cooper, Richard N. 1975. “Prolegomena to the Choice of an International Monetary System.” International Organization 29 (1): 63–97.CrossRefGoogle Scholar
Costabile, Lilia. 2009. “Current Global Imbalances and the Keynes Plan: A Keynesian Approach to Reforming the International Monetary System.” Structural Change and Economic Dynamics 20: 79–89.CrossRefGoogle Scholar
Dailami, Mansoor, and Masson, Paul. 2011. Prospects for a Multipolar International Monetary System. DIIS Report no. 13. Copenhagen: Danish Institute for International Studies.Google Scholar
D’Arista, Jane. 2004. “Dollars, Debts and Dependence: The Case for International Monetary Reform.” Journal of Post Keynesian Economics 26 (4): 557–571.Google Scholar
D’Arista, Jane. 2009. “The Evolving International Monetary System.” Cambridge Journal of Economics 33: 633–652.CrossRefGoogle Scholar
Davidson, Paul. 1992. “Reforming the World’s Money.” Journal of Post Keynesian Economics 15 (2): 153–179.CrossRefGoogle Scholar
Dormael, Armand van. 1978. Bretton Woods: Birth of a Monetary System. London: Macmillan.CrossRefGoogle Scholar
Eichengreen, Barry. 1989. “Hegemonic Stability Theories of the International Monetary System.” In Cooper, Richard N., ed., Can Nations Agree? Washington, DC: Brookings Institution, pp. 255–298.Google Scholar
Eichengreen, Barry. 2009. “The Dollar Dilemma.” Foreign Affairs 88 (5): 53–68.Google Scholar
Eichengreen, Barry. 2010. Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System. New York: Oxford University Press.Google Scholar
Eichengreen, Barry. 2011. “International Liquidity in a Multipolar World.” American Economic Review 102 (3): 207–212.CrossRefGoogle Scholar
Endres, Anthony M. 2005. Great Architects of International Finance: The Bretton Woods Era. London and New York: Routledge.Google Scholar
Endres, Anthony M. 2008. “Frank D. Graham’s Case for Flexible Exchange Rates: A Doctrinal Perspective.” History of Political Economy 40 (1): 133–162.CrossRefGoogle Scholar
Endres, Anthony M. 2009. “Currency Competition: A Hayekian Perspective on International Financial Integration.” Journal of Money, Credit and Banking 41 (6): 1251–1264.CrossRefGoogle Scholar
Farhi, Emmanuel, Gourinchas, Pierre-Olivier, and Rey, Helene. 2011. Reforming the International Monetary System. London: Centre for Economic Policy Research.Google Scholar
Fellner, William. 1972. “The Dollar’s Place in the International System: Suggested Criteria for the Appraisal of Emerging Views.” Journal of Economic Literature 10 (3): 735–756.Google Scholar
Fiorentini, Riccardo, and Montani, Guido. 2010. “Global Imbalances and the Transition to a Symmetric World Monetary System.” Perspectives on Federalism 2 (1): 1–41.Google Scholar
Fleming, J. Marcus. 1972. “Towards a New Regime for International Payments.” Journal of International Economics 2: 345–373.CrossRefGoogle Scholar
Fleming, J. Marcus. 1974. Reflections on the International Monetary System. Essays in International Finance. Princeton, NJ: International Finance Section, Princeton University.Google Scholar
Frankel, Jacob A. 2012. “Internationalization of the RMB and Historical Precedents.” Journal of Economic Integration 27 (3): 329–365.CrossRefGoogle Scholar
Fratianni, Michele. 2012. “The Future of the International Monetary System: Dominant Currencies or Supranational Money? An Introduction.” Open Economies Review 23: 1–12.CrossRefGoogle Scholar
Friedman, Milton. 1953. “The Case for Flexible Exchange Rates.” In Friedman, Milton, Essays in Positive Economics. Chicago: University of Chicago Press, pp. 157–203.Google Scholar
Friedman, Milton. 1984. “Currency Competition: A Skeptical View.” In Salin, Pascal, ed., Currency Competition and Monetary Union. The Hague: Martinus Nijhoff Publishers, pp. 42–46.Google Scholar
Gold, Joseph. 1971. The Fund’s Concept of Convertibility. Washington, DC: International Monetary Fund.Google Scholar
Graham, Frank D. 1949. “Exchange Rates: Bound or Free?” Journal of Finance 4 (1): 13–27.Google Scholar
Haberler, Gottfried. 1954. Currency Convertibility. New York: American Enterprise Institute.Google Scholar
Haberler, Gottfried. 1973. “Prospects for the Dollar Standard.” In Fred Bergsten, C. and Tyler, William G., eds., Leading Issues in International Economic Policy. Essays in Honor of George N. Halm. Lexington: D.C. Heath and Company, pp. 65–80.Google Scholar
Hall, Stephen G., and Tavlas, George S.. 2013. “The Debate About the Revived Bretton-Woods Regime: A Survey and Extension of the Literature.” Journal of Economic Surveys 27 (2): 340–363.CrossRefGoogle Scholar
Halm, George N., ed. 1970. Approaches to Greater Exchange Rate Flexibility: The Bürgenstock Papers. Princeton: Princeton University Press.Google Scholar
Harrod, Roy F. 1971. “Dialogue on the Issues.” In Hinshaw, Randall, ed., The Economics of International Adjustment. Baltimore: Johns Hopkins University Press, pp. 37–39, 93–94.Google Scholar
Harrod, Roy F. 1972. “Problems Perceived in the International Financial System.” In Keith Acheson, A., , John Chant, F., and Prachowny, Martin F., eds., Bretton Woods Revisited. London: Macmillan, pp. 5–19.CrossRefGoogle Scholar
Hartmann, Philip. 1998. Currency Competition and Foreign Exchange Markets. Cambridge: Cambridge University Press.Google Scholar
Hawtrey, Ralph G. 1946. Bretton Woods for Better or Worse. London: Longmans, Green and Company.Google Scholar
Hayek, Friedrich A. 1937. Monetary Nationalism and International Stability. New York: Longmans.Google Scholar
Hayek, Friedrich A. [1978a] 1999. “Choice in Currency.” In Kresge, S., ed., The Collected Works of F. A. Hayek. Volume IV. Chicago: University of Chicago Press, pp. 115–127.Google Scholar
Hayek, Friedrich A. [1978b] 1999. “The Denationalization of Money.” In Kresge, S., ed., The Collected Works of F. A. Hayek. Volume IV. Chicago: University of Chicago Press, pp. 128–229.Google Scholar
Hayek, Friedrich A. [1979] 1999. “Toward a Free Market in Money.” In Kresge, S., ed., The Collected Works of F. A. Hayek. Volume IV. Chicago: University of Chicago Press, pp. 230–237.Google Scholar
James, Harold. 1996. International Monetary Cooperation Since Bretton Woods. New York: Oxford University Press.Google Scholar
James, Harold. 2011. “The Multiple Contexts of Bretton Woods.” Past and Present 210 (6): 290–308.CrossRefGoogle Scholar
Johnson, Harold G. 1969. “The Case for Flexible Exchange Rates 1969.” In Harold, Johnson, Further Essays in Monetary Economics. London: Allen & Unwin, pp. 198–222.Google Scholar
Johnson, Harold G. 1972. “Political Economy Aspects of International Monetary Reform.” Journal of International Economics 2: 401–423.CrossRefGoogle Scholar
Joshi, Vilay, and Skidelsky, Robert. 2010. “Keynes, Global Imbalances and International Monetary Reform.” In Claessens, Stijn, ed., Rebalancing the Global Economy. London: Centre for Economic Policy Research, pp. 173–179.Google Scholar
Kahn, Richard. 1973. “The International Monetary System.” American Economic Review 63 (2): 181–188.Google Scholar
Kenen, Peter B. 2008. “Bretton Woods System.” In Durlauf, Stephen N. and Blume, Lawrence E., eds., New Palgrave Dictionary of Economics. Online, second edition. http://www.dictionaryofeconomics.com.ezproxy.auckland.ac.nz/article?id=pde2008_B000198. doi:10.1057/9780230226203.0161. Accessed 28 May 2017.Google Scholar
Kenen, Peter B. 2010. “An SDR Based Reserve System.” Journal of Globalization and Development 1 (2): 1–12.CrossRefGoogle Scholar
Kenen, Peter B. 2011. “Currency Internationalisation: An Overview.” BIS Papers 61: 1–18.Google Scholar
Keynes, John M. 1943. “Proposals for an International Clearing Union.” In Horsefield, J. K., ed., The International Monetary Fund 1945–65. Volume III: Documents. Washington DC: International Monetary Fund, pp. 19–36.Google Scholar
Kindleberger, Charles P. 1965. Balance of Payments Deficits and the International Market for Liquidity. Princeton Studies in International Finance, no. 46. Princeton, NJ: International Finance Section, Princeton University.Google Scholar
Kindleberger, Charles P. 1967. The Politics of International Money and World Language. Essays in International Finance. Princeton, NJ: International Finance Section, Princeton University.Google Scholar
Kindleberger, Charles P. 1972. “The Benefits of International Money.” Journal of International Economics 2: 425–442.CrossRefGoogle Scholar
Kindleberger, Charles P. 1973. The World in Depression, 1929–39. Berkeley: University of California Press.Google Scholar
Kindleberger, Charles P. 1979. “Is Symmetry Possible in International Money?” In Greenfield, Harry, Levenson, Albert, Hamovitch, William, and Rotwein, Eugene, eds., Theory for Economic Efficiency: Essays in Honor of Abba P. Lerner. London: MIT Press, pp. 62–75.Google Scholar
Kindleberger, Charles P. 1989. Economic Laws and Economic History. New York: Cambridge University Press.Google Scholar
Krugman, Paul. 1984. “The International Role of the Dollar: Theory and Retrospect.” In Bilson, John and Marston, Richard, eds., Exchange Rate Theory and Practice. Chicago: University of Chicago Press, pp. 261–278.Google Scholar
Lutz, Friedrich A. 1943. International Monetary Mechanisms: The Keynes and White Proposals. Princeton, NJ: International Finance Section, Princeton University.Google Scholar
Lutz, Friedrich A. 1954. “The Case for Flexible Exchange Rates.” Banca Nazionale del Lavoro Quarterly Review 7: 175–185.Google Scholar
Machlup, Fritz. 1972. The Alignment of Foreign Exchange Rates: The First Horwitz Lectures. New York: Praeger Publishers.Google Scholar
McKinnon, Ronald I. 1969. Private and Official International Money: The Case for the Dollar. Essays in International Finance. Princeton, NJ: International Finance Section, Princeton University.Google Scholar
McKinnon, Ronald I. 1974. A New Tripartite Monetary Agreement or a Limping Dollar Standard? Essays in International Finance. Princeton, NJ: International Finance Section, Princeton University.Google Scholar
McKinnon, Ronald I. 1996a. The Rules of the Game: International Money and Exchange Rates. Cambridge, MA: MIT Press.Google Scholar
McKinnon, Ronald I. 1996b. “Direct and Indirect Concepts of Currency Substitution.” In Mizen, Paul and Pentecost, Edward, eds., The Macroeconomics of International Currencies. Cheltenham: Edward Elgar Publishers, pp. 44–59.Google Scholar
Meade, James. 1955. “The Case for Flexible Exchange Rates.” Three Banks Review 27: 3–27.Google Scholar
Mundell, Robert A. 1968. International Economics. New York: Macmillan.Google Scholar
Mundell, Robert A. 1972. “The Future of the International Monetary System.” In Acheson, Keith, Chant, John, and Prachowny, Martin, eds., Bretton Woods Revisited. London: Macmillan, pp. 91–104.CrossRefGoogle Scholar
Mundell, Robert A. 1977. “Concluding Remarks.” In Mundell, Robert and Polak, Jacques, eds., The New International Monetary System. New York: Columbia University Press, pp. 237–244.Google Scholar
Mundell, Robert A. 1994. “Discussion.” In Kenen, Peter B., Papadia, Fabrizio, and Saccomanni, Francesco, eds., The International Monetary System. Cambridge: Cambridge University Press, pp. 74–78.Google Scholar
Mundell, Robert A. 2012. “The Case for a World Currency.” Journal of Policy Modeling 34: 568–578.CrossRefGoogle Scholar
Nurkse, Ragnar. 1944. International Currency Experience. Geneva: League of Nations.Google Scholar
Obstfeld, Maurice. 2011. “The SDR as an International Reserve Asset: What Future?” Working Paper. London: International Growth Centre, London School of Economics.Google Scholar
Ocampo, José A. 2010. “Reforming the Global Reserve System.” In Griffith-Jones, Stephanie, Ocampo, José, and Stiglitz, Joseph, eds., Time for a Visible Hand: Lessons from the 2008 World Financial Crisis. New York: Oxford University Press, pp. 290–311.Google Scholar
Polak, Jacques. 1994. “The International Monetary Issues of the Bretton Woods Era.” In Kenen, Peter B., Papadia, Fabrizio, and Saccomanni, Franceso, eds., The International Monetary System. Cambridge: Cambridge University Press, pp. 19–34.Google Scholar
Prasad, Edward. 2014. Dollar Trap: How the U.S. Dollar Tightened Its Grip on Global Finance. Princeton, NJ: Princeton University Press.Google Scholar
Rossi, Sergio. 2007. “The Monetary-Policy Relevance of an International Settlement Institution.” In Marcuzzo, Maria and Giacomin, Alberto, eds., Money and Markets: A Doctrinal Approach. London: Routledge, pp. 96–114.Google Scholar
Samuelson, Paul A. 1972. “Heretical Doubts About the International Mechanisms.” Journal of International Economics 2: 443–453.CrossRefGoogle Scholar
Schwartz, Anna J. 1987. Money in Historical Perspective. Chicago: University of Chicago Press.CrossRefGoogle Scholar
Solomon, Robert. 1996. “Creation and Evolution of the SDR.” In Mussa, Michael, Boughton, James, and Isard, Peter, eds., The Future of the SDR in the Light of Changes in the International Financial System. Washington: International Monetary Fund, pp. 25–40.Google Scholar
Stiglitz, Joseph, and Greenwald, Bruce. 2010. “Towards a New Global Reserve System.” Journal of Globalization and Development 1 (2): 1–24.CrossRefGoogle Scholar
Thimann, Christian. 2008. “Global Roles of Currency.” International Finance 11 (3): 211–245.CrossRefGoogle Scholar
Tobin, James. 1982. “The State of Exchange Rate Theory: Some Skeptical Observations.” In Triffin, Robert and Cooper, Richard, eds., The International Monetary System Under Flexible Exchange Rates. Cambridge, MA: Ballinger Publishers, pp. 115–128.Google Scholar
Triffin, Robert. [1947] 1966. “International versus Domestic Money.” In Triffin, Robert, The World Money Maze. New Haven: Yale University Press, pp. 177–179.Google Scholar
Triffin, Robert. [1954] 1966. “The Exhumation of Convertibility à la Key Currencies and the Oncoming Dollar Glut, 1953–60.” In Triffin, Robert, The World Money Maze. New Haven: Yale University Press, pp. 201–229.Google Scholar
Triffin, Robert. 1960. Gold and the Dollar Crisis. New Haven: Yale University Press.Google Scholar
Triffin, Robert. 1972. “International Monetary Collapse and Reconstruction in April 1972.” Journal of International Economics 2: 375–400.CrossRefGoogle Scholar
United Nations Commission. 2009. Report of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System. New York: United Nations.Google Scholar
Whitman, Marina von. 1974. “The Current Future and Role of the Dollar: How Much Symmetry?” Brookings Papers on Economic Activity 3: 539–583.CrossRefGoogle Scholar
Williams, John H. [1943] 1949. “Currency Stabilization: The Keynes and White Plans.” In Williams, John, Postwar Monetary Plans and Other Essays. Oxford: Blackwell, pp. 141–154.Google Scholar
Williams, John H. [1944] 1949. “Currency Stabilization: American and British Attitudes.” In Williams, John, Postwar Monetary Plans and Other Essays. Oxford: Blackwell, pp. 103–122.Google Scholar
Williamson, John. 1976. “The Benefits and Costs of an International Monetary Non System.” In Bernstein, Edward M., ed., Reflections on Jamaica. Princeton, NJ: International Finance Section, Princeton University, pp. 54–59.Google Scholar
Williamson, John. 1985. “On the System in Bretton Woods.” American Economic Review 72 (2): 74–79.Google Scholar
Williamson, John. 2006. “Meade’s Analysis and Today’s Global Imbalances.” Lecture delivered at Cambridge University, November 21, Peterson Institute of International Economics, Washington, DC.Google Scholar