Floating Exchange Rates at Fifty
Douglas A. Irwin (PIIE) and Maurice Obstfeld (PIIE), editors
Book Description
Body
Fifty years ago, in March 1973, the major industrial economies abandoned fixed exchange rates, conclusively ending the post–World War II Bretton Woods arrangements. Proponents believed their action would strengthen countries' ability to reconcile domestic macroeconomic policies with the balance of payments. But opponents feared it would initiate a new era of instability and financial shocks. Since 1973, much of the world has moved away from fixed exchange rates to a variety of regimes based on considerable exchange rate flexibility. But international trade conflicts and unstable capital flows, along with a rise in financial crises around the world, have nonetheless accompanied the global shift away from exchange rate pegs.
How has the international monetary system performed over the past half century? What have we learned from the experience of more flexible exchange rates? What has been the impact on macroeconomic and financial stability in the years since? This book derives from papers delivered at a conference that brought together leading economists and policymakers to debate and discuss these questions, as well as to assess the evolution of the international monetary system, the dominance of the US dollar, and the role of exchange rate regimes in shaping the world economy.
Data Disclosure:
The data underlying this analysis are available for download here [80MB zip file].
Contents
Preface
Acknowledgments
Introduction
Douglas A. Irwin and Maurice Obstfeld
1. From the Postwar World Economy to the Modern World Economy, 1973–2023
Maurice Obstfeld
Part I Historical Perspective on 1973 and Its Legacy
2. From There to Here: 1973 Expectations and 2023 Reality
Edwin M. Truman
3. The Greatest of All International Monetary Reforms
C. Fred Bergsten
4. The Source of Monetary Instability, 1980–2020
Robert Z. Aliber
5. Reflections on Flexible Exchange Rates after 50 years
Anne O. Krueger
6. International Finance in 1973 and 2023: What Changed in Half a Century?
Richard Portes
Part II Politics, Institutions, and Ideas in International Monetary Evolution
7. The Political Economy of International Monetary Arrangements
Jeffry Frieden
8. The Euro: A Phoenix Rising from the Ashes of the Dollar?
Harold James
9. Has Japan Conquered the Fear of Freedom? Reflections on Exchange Rate Systems and Monetary Policy
Masazumi Wakatabe
10. The Trade-Finance Disconnect: Geopolitical Repricing and Its Consequences
Yanliang Miao and Zhou Fan
11. Evolving Views on Exchange Rates and Currency Unions
Linda Tesar
Part III International Prices, International Adjustment, and Trade
12. The Floating Dollar and the Geography of US Manufacturing
Katheryn Russ
13. Will Persistent Trade Imbalances Become a Problem?
Joseph E. Gagnon
14. Floating Exchange Rates and Trade Policy
Douglas A. Irwin
15. Fifty Years of Exchange Rate Pass-Through from a Central Banker's Perspective
Catherine L. Mann
16. Replacing the Golden Anchor for Price Stability
Kristin Forbes
Part IV Floating Exchange Rates and Emerging Markets
17. How Much Insulation Do Flexible Exchange Rates Provide for Emerging Markets?
Andrés Velasco
18. Emerging Markets and the Transition to Stability: Role of Flexible Exchange Rates
José De Gregorio
19. Why Do Oil Producers in the Middle East and North Africa Still Fix Their Currencies?
Adnan Mazarei
20. Role of Flexible Exchange Rates in Three Financial Shocks in Indonesia
Muhamad Chatib Basri
Part V The Dollar and International Financial Markets
21. The Fed's International Dollar Liquidity Facilities and the COVID-19 Period
Linda S. Goldberg
22. The Dollar-Based Financial System through the Window of the Foreign Exchange Swap Market
Hyun Song Shin
23. Dollar Dominance in Global Finance and Exchange Rate Policies
Şebnem Kalemli-Özcan
24. Strengths and Flaws of the Dollar-Based System
Hélène Rey
Part VI The Futures of the Dollar, the Euro, and the Renminbi
25. "Dollar Rivals": Can the Dollar-Based System Be Improved or Replaced?
Jeffrey A. Frankel
26. The Dollar Might Slip but Will Still Rule
Eswar Prasad
27. US and Dollar Dominance in the International Monetary System: Weakening but Not Disappearing
Philippe Martin
28. 50 Years since the End of Bretton Woods, 25 Years since the Launch of the Euro
Philip R. Lane
29. The Renminbi in the Post-Bretton Woods Era
Shang-Jin Wei
Index