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In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.
The challenges raised by the current global crisis are not unlike the interwar problems that led to the establishment of the Bretton Woods financial architecture. In the short to medium run, the worldwide slump might lead to conflicts over the appropriate levels of inflation and exchange rates, as well as to protectionist pressures. In the [...]
One may regard it as a mistake to convene a conference that is widely described as Bretton Woods II without the two years plus of preparation that preceded Bretton Woods I in 1944. But the die has now been cast, and the leaders of the G-20 countries are going to convene shortly in the first stage of what is widely described as Bretton Woods II. That being so, it behooves those of us interested in the topic to suggest the agenda that they should pursue.
UK Prime Minister Gordon Brown has renewed his call, first issued on April 18, 2008 at the John F. Kennedy Library, for a new Bretton Woods conference. The stated objective is to remake the international financial architecture, including the International Monetary Fund (IMF), to strengthen its surveillance and regulatory role over the international financial system and to equip it better to cope with crises. French President Nicolas Sarkozy has joined him, backed by the 27-member European Union. Sarkozy and EU Commission President José Manuel Barroso will meet on Saturday at Camp David to discuss their plans with US President George W. Bush. Good-bye substance! Hello theater! This is a dangerous, grandstand play likely to set back serious consideration of crisis prevention in the future.