U.S. intervention during the Bretton Wood Era:1962-1973
AbstractBy the early 1960s, outstanding U.S. dollar liabilities began to exceed the U.S. gold stock, suggesting that the United States could not completely maintain its pledge to convert dollars into gold at the official price. This raised uncertainty about the Bretton Woods parity grid, and speculation seemed to grow. In response, the Federal Reserve instituted a series of swap lines to provide central banks with cover for unwanted, but temporary accumulations of dollars and to provide foreign central banks with dollar funds to finance their own interventions. The Treasury also began intervening in the market. The operations often forestalled gold losses, but in so doing, delayed the need to solve Bretton Woods’ fundamental underlying problems. In addition, the institutional arrangements forged between the Federal Reserve and the U.S. Treasury raised important questions bearing on Federal Reserve independence.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 1108.
Date of creation: 2011
Date of revision:
Other versions of this item:
- Michael D. Bordo & Owen F. Humpage & Anna J. Schwartz, 2011. "U.S. Intervention During the Bretton Woods Era: 1962-1973," NBER Working Papers 16946, National Bureau of Economic Research, Inc.
- E0 - Macroeconomics and Monetary Economics - - General
- N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-30 (All new papers)
- NEP-CBA-2011-04-30 (Central Banking)
- NEP-HIS-2011-04-30 (Business, Economic & Financial History)
- NEP-IFN-2011-04-30 (International Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael D. Bordo & Ali Dib & Lawrence Schembri, 2007.
"Canada's Pioneering Experience with a Flexible Exchange Rate in the 1950s:(Hard) Lessons Learned for Monetary Policy in a Small Open Economy,"
NBER Working Papers
13605, National Bureau of Economic Research, Inc.
- Michael Bordo & Ali Dib & Lawrence Schembri, 2010. "Canada's Pioneering Experience with a Flexible Exchange Rate in the 1950s: (Hard) Lessons Learned for Monetary Policy in a Small Open Economy," International Journal of Central Banking, International Journal of Central Banking, vol. 6(3), pages 51-99, September.
- Michael Bordo & Ali Dib & Lawrence Schembri, 2007. "Canada's Pioneering Experience with a Flexible Exchange Rate in the 1950s: (Hard) Lessons Learned for Monetary Policy in a Small Open Economy," Working Papers 07-45, Bank of Canada.
- Rockoff, Hugh & White, Eugene N., 2012. "Monetary Regimes and Policy on a Global Scale: The Oeuvre of Michael D. Bordo," MPRA Paper 49672, University Library of Munich, Germany, revised May 2013.
- Michael D. Bordo & Owen F. Humpage & Anna J. Schwartz, 2012. "Bretton Woods, swap lines, and the Federal Reserve’s return to intervention," Working Paper 1232, Federal Reserve Bank of Cleveland.
- Owen F. Humpage & Sanchita Mukherjee, 2013. "Even keel and the Great Inflation," Working Paper 1315, Federal Reserve Bank of Cleveland.
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