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Bretton Woods and the U.S. decision to intervene in the foreign-exchange market, 1957-1962

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  • Michael D. Bordo
  • Owen F. Humpage
  • Anna J. Schwartz

Abstract

The deterioration in the U.S. balance of payments after 1957 and an accelerating loss of gold reserves prompted U.S. monetary authorities to undertake foreign-exchange-market interventions beginning in 1961. We discuss the events leading up to these interventions, the institutional arrangements developed for that purpose, and the controversies that ensued. Although these interventions forestalled a loss of U.S. gold reserves, in the end, they only delayed more fundamental adjustments and, in that respect, were a failure.

Suggested Citation

  • Michael D. Bordo & Owen F. Humpage & Anna J. Schwartz, 2006. "Bretton Woods and the U.S. decision to intervene in the foreign-exchange market, 1957-1962," Working Papers (Old Series) 0609, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwp:0609
    DOI: 10.26509/frbc-wp-200609
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    References listed on IDEAS

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    1. Alfred Broaddus & Marvin Goodfriend, 1996. "Foreign exchange operations and the Federal Reserve," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 1-20.
    2. Michael D. Bordo & Barry Eichengreen, 1993. "A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform," NBER Books, National Bureau of Economic Research, Inc, number bord93-1, March.
    3. Michael D. Bordo, 1993. "The Bretton Woods International Monetary System: A Historical Overview," NBER Chapters, in: A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform, pages 3-108, National Bureau of Economic Research, Inc.
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    Keywords

    Foreign exchange administration; Bretton Woods Agreements Act;

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