The International Monetary System: Living with Asymmetry
AbstractThis paper analyzes current stresses in the two key areas that concerned the architects of the original Bretton Woods system: international liquidity and exchange rate management. Despite radical changes since World War II in the market context for liquidity and exchange rate concerns, they remain central to discussions of international macroeconomic policy coordination. To take two prominent examples of specific (and related) coordination problems, liquidity issues are paramount in strategies of national self-insurance through foreign reserve accumulation, while recent attempts by emerging market economies (EMEs) to limit real currency appreciation have relied heavily on nominal exchange rate management. A central message is that a diverse set of potential asymmetries among sovereign member states provides fertile ground for a variety of coordination failures. The paper goes on to discuss institutions and policies that might mitigate some of these inefficiencies.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17641.
Date of creation: Dec 2011
Date of revision:
Publication status: published as Maurice Obstfeld. "The International Monetary System: Living with Asymmetry," in Robert C. Feenstra and Alan M. Taylor, editors, "Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century" University of Chicago Press (2014)
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- Maurice Obstfeld, 2013. "The International Monetary System: Living with Asymmetry," NBER Chapters, in: Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century, pages 301-336 National Bureau of Economic Research, Inc.
- Obstfeld, Maurice, 2011. "The International Monetary System: Living with Asymmetry," CEPR Discussion Papers 8703, C.E.P.R. Discussion Papers.
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-13 (All new papers)
- NEP-CBA-2011-12-13 (Central Banking)
- NEP-IFN-2011-12-13 (International Finance)
- NEP-MON-2011-12-13 (Monetary Economics)
- NEP-OPM-2011-12-13 (Open Economy Macroeconomic)
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