IDEAS home Printed from https://ideas.repec.org/a/mes/postke/v36y2014i4p607-634.html
   My bibliography  Save this article

Systemic equilibrium in a Bretton Woods II-type international monetary system: the special roles of reserve issuers and reserve accumulators

Author

Listed:
  • Kenneth Austin

Abstract

This article develops a model, based on balance-of-payment identities, of the new international monetary system (Bretton Woods II or BWII). It shows that if some countries engineer current account surpluses by exchange-rate manipulation and foreign-reserve accumulation, the burden of the corresponding current account deficits falls first on the reserve-issuing countries, unless those savings inflows are diverted elsewhere. The imbalances of the BWII period result from official, policy-driven reserve flows, rather than market-determined, private savings flows. The struggle to divert these unwanted financing flows is at the root of the "currency wars" within the system.

Suggested Citation

  • Kenneth Austin, 2014. "Systemic equilibrium in a Bretton Woods II-type international monetary system: the special roles of reserve issuers and reserve accumulators," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 36(4), pages 607-634.
  • Handle: RePEc:mes:postke:v:36:y:2014:i:4:p:607-634
    DOI: 10.2753/PKE0160-3477360402
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2753/PKE0160-3477360402
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. El dolar es el principal enemigo de la economía de Estados Unidos
      by Marco Antonio Moreno in Elblogsalmon on 2014-09-10 08:14:45
    2. Are we starting to see why its really the exorbitant “burden”
      by Michael Pettis in China Financial Markets on 2014-10-05 18:46:31
    3. 10 Reasons Why Reserve Currency Status Is An "Exorbitant Burden"
      by Tyler Durden in Zero Hedge on 2014-10-07 04:01:12
    4. Full employment, trade deficits, and the dollar as reserve currency. What are the connections?
      by Jared Bernstein in On the Economy on 2014-10-07 17:31:38
    5. How might a China slowdown affect the world?
      by Michael Pettis in China Financial Markets on 2014-12-02 13:13:58
    6. How might a China slowdown affect the world?
      by Michael Pettis in Credit Writedowns on 2014-12-02 22:02:33
    7. Will the AIIB one day matter?
      by Michael Pettis in China Financial Markets on 2015-04-11 18:33:11
    8. How we calculate US job losses from currency management
      by Jared Bernstein in On the Economy on 2015-05-11 21:02:32

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:postke:v:36:y:2014:i:4:p:607-634. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/MPKE20 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.