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Macroeconomic Adjustment Under Bretton Woods and the Post-Bretton Woods Float: An Impulse-Response Analysis Author info | Abstract | Publisher info | Download info | Related research | Statistics Tamim Bayoumi
Barry Eichengreen
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We use time-series methods to estimate a simple aggregate-supply aggregate-demand model in order to analyze the comparative performance of fixed- and flexible-exchange-rate systems and test competing hypotheses designed to explain shifts between exchange-rate regimes. The paper provides a coherent explanation of the causes and consequences of the shift from the Bretton Woods System of pegged exchange rates to the post-Bretton-Woods float. The shift from fixed to floating was associated with a modest increase in the cross-country dispersion of supply shocks but not with an increase in their average magnitude. In contrast, there was little change in either the cross-country dispersion or the average magnitude of demand shocks. More important in explaining the collapse of Bretton Woods were factors that heightened the impact of shocks on the external accounts, forcing governments to respond to supply shocks with changes in demand that stabilized prices and the exchange rate at the expense of increased output volatility.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
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Date of creation: Sep 1992Date of revision:
Handle: RePEc:nbr:nberwo:4169Note: IFMContact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
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Article Paper Bayoumi, Tamim & Eichengreen, Barry, 1992.
"Macroeconomic Adjustment Under Bretton Woods and the Post-Bretton-Woods Float: An Impulse-Response Analysis ,"
CEPR Discussion Papers
729, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Tamim Bayoumi and Barry Eichengreen., 1992.
"Macroeconomic Adjustment Under Bretton Woods and the Post-Bretton-Woods Float: An Impulse- Response Analysis ,"
Economics Working Papers
92-201, University of California at Berkeley.
[Downloadable!] Tamim Bayoumi and Barry Eichengreen., 1993.
"Macroeconomic Adjustment under Bretton Woods and the Post-Bretton-Woods Float: An Impulse-Response Analysis ,"
Center for International and Development Economics Research (CIDER) Working Papers
C93-006, University of California at Berkeley.
[Downloadable!] This paper has been announced in the following NEP Reports :
References listed on IDEAS 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.: Barry Eichengreen, 1992.
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Other versions: Bayoumi, Tamim & Eichengreen, Barry, 1992.
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CEPR Discussion Papers
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Other versions: Baxter, M. & Stockman, A.C., 1988.
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RCER Working Papers
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Blanchard, Olivier Jean & Quah, Danny, 1989.
"The Dynamic Effects of Aggregate Demand and Supply Disturbances ,"
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Other versions: Hans Genberg & Alexander Swoboda, 1993.
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in: A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform, pages 269-316
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[Downloadable!] Clarida, Richard & Gali, Jordi, 1994.
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