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1991 | Buch

Evolution of the International and Regional Monetary Systems

Essays in Honour of Robert Triffin

herausgegeben von: Alfred Steinherr, Daniel Weiserbs

Verlag: Palgrave Macmillan UK

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Inhaltsverzeichnis

Frontmatter

International Co-ordination of Economic Policies: Difficulties and Perspectives

Frontmatter
1. The International Monetary System: Pluralism and Interdependence
Abstract
Robert Triffin is my dear friend and long-time colleague, at Harvard, mainly at Yale, and in Washington. He is a few years my senior, and although that difference seems to diminish with time, I still look up to him as a fount of experience, judgement and wisdom. He tutored me, informally and irregularly to be sure, in international economics and finance. Like all the world, I marvelled at his prescience in the 1950s and 1960s about the gold exchange standard. At my urging, he became a consultant to the Kennedy Council of Economic Advisers, and together we sought to advance the cause of internationalised liquidity in the US government. We did not achieve our goals, but we did nudge developments somewhat in a Triffinesque direction.
James Tobin
2. Whither Macro-economic Policy Co-ordination?
Abstract
One of the major professional accomplishments of Robert Triffin was his success in propagating the concept of a managed reserve system as an instrument for exerting a stabilising influence on the behaviour of the global economy. That vision inspired the work of the Committee of Twenty. As we all know, and at least some of us regret, the C-20 did not succeed in reaching agreement on a reformed international monetary system. Instead, the regime degenerated into what could only be described as a non-system, which reached its extreme form with the aggressive unilateralism practised by the first Reagan administration.
John Williamson
3. Potential Gains from and Obstacles to International Policy Co-ordination
Abstract
I first came across Robert’s name when, as a graduate student at Harvard in the immediate post-war years, I was assigned to read Monopolistic Competition and General Equilibrium Theory. I was deeply impressed then with its lucidity and elegance in bridging the gap between the Anglo-Saxon and the Continental approaches to market equilibrium and in clarifying the whole subject of imperfect competition. Even in that work — his Ph.D. thesis at Harvard — Robert’s propensity to reform was evident. So was his ability to write unusual prefaces. Here was a man with a mind and a heart. I first met and came to know Robert in the early 1950s when I was at the Federal Reserve Board and he was commuting from Yale to Washington as a consultant to Arthur Burns’ Council of Economic Advisers. Over the years since then, we have attended many meetings together and I have observed him as an incisive analyst and theorist, a prolific author, and an indefatigable reformer of international monetary arrangements.
Robert Solomon
4. International Central Bank Co-operation: What It Can — and Cannot — Achieve
Abstract
I propose to comment on three interconnected areas of central bank co-operation: exchange market intervention, monetary policy coordination and safeguarding the smooth functioning of the financial system. My remarks are not directed at questions related to central bank co-operation in the management of the European Monetary System as it stands today (except by way of reference) or those raised by its possible further development. Nor are they addressed to the broader question of reforming global monetary relations. Their compass is more limited and more modest: to explore the potential for, and the limits of, central bank co-operation between the major participants in the system of managed floating, on the assumption that there is no major change in the present institutional framework of international co-operation.
Alexandre Lamfalussy
5. Experience and Problems in International Monetary Policy Co-ordination
Abstract
Looking back over the post World War II period it seems that the 1950s and 1960s were the golden days of economic co-operation under American tutelage. The United States had lured the European countries into this with Marshall Plan money, not merely out of generosity but also out of self-interest in the speedy recovery of Europe’s economies. Economic growth was the main objective, full employment the only acceptable constraint, and effective demand the main policy parameter. Inflation was considered a nuisance to be tolerated if not ignored as long as possible, leaving the role of disciplinarian to recurrent external payments problems. Balance-ofpayments crises involving major industrial countries, already then occasionally due to external shocks (for example the Suez crisis), put international monetary co-operation frequently to the test. Surplus countries could still open safety valves to deal with their problems, by progressively eliminating existing trade and payments restrictions, replenishing their still modest gold and dollar reserves or ‘recycling’ part of their high savings through bilateral or multilateral aid.
Wolfgang Rieke

Approaches to External Disequilibria

Frontmatter
6. Approaches to Managing External Equilibria: Where We Are, Where We Might Be Headed, and How We Might Get There
Abstract
While not all economists around the world would agree with Robert Triffin’s statement that the external deficit of the United States is the central international economic problem today, a remarkably large majority would agree with him — remarkable by the normal standard of agreement among economists. The consensus breaks down, however, when it comes to the question of why the US external deficit is so important.
Edwin M. Truman
7. The Exchange Rate and the Trade Balance: Insular Versus Open Economies
Abstract
The relationship between the exchange rate and the trade balance has been at the centre of post-war controversies on how exchange rate regimes among the major industrial economies should be organised.
Ronald I. McKinnon
8. Exchange Rate Volatility and Misalignment: Evaluating some Proposals for Reform
Abstract
The need for reform of the international monetary system has been a recurring theme in the writings of Robert Triffin.2 In this paper, we follow Professor Triffin’s lead and analyse several proposals for reducing the volatility and/or misalignment of key-currency exchange rates. The proposals examined are a system of target zones, the imposition of controls or taxes on international capital flows, and a strengthening of international co-ordination over economic policies. Our purpose is not to endorse one proposal and to dismiss others. For one thing, some of the proposals have common elements. For another, some features of each of the proposals are already present in the existing exchange rate system. Instead, we see evaluation of these proposals as a useful vehicle for identifying issues that merit attention in any serious examination of how the functioning of the international monetary system might be improved.
Jacob A. Frenkel, Morris Goldstein

International and Regional Monetary Problems

Frontmatter
9. Robert Triffin and the Reform of the International Monetary System
Abstract
The most remarkable thing about the work and personality of Professor Robert Triffin, in my view, is the combination of three aspects: his power of analysis, his institutional imagination, and his pragmatism as a practitioner.
Jacques de Larosière
10. The Future of International Monetary Relations
Abstract
The name of Professor Triffin is closely linked to the crusade for the rationalisation of international monetary issues. For more than 40 years he has analysed, proposed and persuaded relentlessly. His lifetime works are models of modesty and perseverance. International monetary issues are probably the only branch of economic science where theory and political action are so intimately intertwined. During his professional career, Professor Triffin has most admirably demonstrated the close relationship between pertinent diagnosis and proposals for reform and has occupied eminent official positions and prestigious academic posts. However, international monetary issues are fraught with disappointment, since being right does not mean being heard. Professor Triffin should be the first to know! After publishing his book ‘Europe and the Money Muddle’, a pre-eminent and authoritative work, he witnessed the dissolution of the European Payments Union and the agony of the Bretton Woods Charter. If only Europe could have integrated the monetary regime within the framework of the Treaty of Rome based on Professor Triffin’s proposals to transform the European Payments Union (EPU); if only Europe could have collectively addressed the return of convertibility instead of confronting it in an individualistic manner, thereby exacerbating national egoisms.
Michel Aglietta
11. Monetary Management in Latin America
Abstract
With growing world economic interdependence, there has been a distinct loss in the autonomy of domestic monetary management, at least in the developing countries, and especially in Latin America. In addition, the degree of instability prevailing since the 1970s in financial flows, world commodity prices and trade policies has made the task of regulating the money supply more difficult. The external debt service burden, moreover, has distorted the domestic economies and the local financial and monetary systems to a point at which it constitutes an overriding factor that jeopardises positive monetary management. These three sets of factors external to the scope of the domestic economies are now conditioning to a larger extent than before the ability of central banks and national treasuries to carry out appropriate monetary management policies with some degree of success.
Victor L. Urquidi
12. A Proposal for Co-operative Relief of Debt in Africa (CORDA)
Abstract
For the last 15 years the economic situation in sub-Saharan African countries has undergone continuous deterioration, and has reached the point where not only their prospects of future development but also their ability to maintain reasonable living standards for a large fraction of the population are seriously compromised. During the years 1973–80 the Gross Domestic Product of this region grew, in constant prices, at the low annual rate of 3.2 per cent, exactly half of the growth rate during the years 1965–73 (6.4 per cent); this is barely greater than the mean annual rate of population growth. The situation in Africa has further deteriorated during the 1980s as, for most of these years, real Gross Domestic Product growth has been negative.2 On the other hand, per capita investment in 1987 was below what it was in the mid-1960s while, as measured against its 1980 level, it has gone down by one-third. According to the World Bank, the chronic debt problems of Africa justify today the term ‘crisis’: ‘the development process in these countries has stalled. The effects will be measured not simply in terms of falling average living standards but of the relapse into poverty of large sections of the populations.’3
Jacques Drèze, Albert Kervyn, Jean-Philippe Platteau, Paul Reding

European Monetary Integration

Frontmatter
13. European Monies and European Monetary Union
Abstract
The subject I will discuss below to pay tribute to Robert Triffin is a limited one: ‘European Monies and European Monetary Union’. It is limited because it does not address what are to my mind the two hardest questions raised by European monetary union, namely: what would be needed on the economic side for a monetary union to be viable? and what operational arrangements are necessary for a monetary union to function? With these limitations, I shall offer three brief propositions, one question, and a tentative conclusion.
Tommaso Padoa Schioppa
14. Is the European Monetary System a DM-Zone?
Abstract
It has been claimed by many observers that the EMS works in an asymmetric way. In this asymmetric interpretation of the workings of the EMS, Germany is seen as the central country which determines its monetary policy more or less independently from what happens in the rest of the EMS. The other countries peg their currencies to the Deutschmark and, in so doing, subordinate their monetary policies to German policies. This interpretation of the EMS has led to the widespread view that the system is de facto a Deutschmark zone. It is no exaggeration to state that this interpretation of the workings of the EMS has become the conventional wisdom.2
Paul de Grauwe
15. ECU Financial Markets: Recent Evolution and Perspectives
Abstract
One of the major brain childs of Robert Triffin is without any doubt the ECU (European Currency Unit). In Triffin’s thinking the ECU was to assume several functions: first, to provide an alternative to the US dollar in international official reserve holdings; second, to provide an alternative in private internal portfolios; third, to provide an alternative to the US dollar in international trade invoicing and payments; and, finally, to become eventually the currency of the integrated European economic and monetary union. The desirability of these functions is both obvious and debatable. The evolution of the international monetary system has redistributed the initial concentration of the key currency role of the dollar over several currencies. This redistribution has been influenced both by market forces and political decisions, although national policy makers have been hesitant to declare unequivocally their fundamental preferences concerning the international role of their currency. The authorities of the currencies which have the potential of becoming dollar substitutes are reluctant to assume the responsibility of managing an international reserve currency exposed to the risk of shifts in preferences of major holders of such a currency; tempting is the scope of seigniorage privileges.
Alfred Steinherr, Jacques Girard
Backmatter
Metadaten
Titel
Evolution of the International and Regional Monetary Systems
herausgegeben von
Alfred Steinherr
Daniel Weiserbs
Copyright-Jahr
1991
Verlag
Palgrave Macmillan UK
Electronic ISBN
978-1-349-11061-2
Print ISBN
978-1-349-11063-6
DOI
https://doi.org/10.1007/978-1-349-11061-2