tailieunhanh - Exorbitant global imbalances

The Bretton Woods system in the aftermath of the Second World War provided the world economies with a monetary framework to replace the Gold Standard that prevailed in the preceding period. The system to rebuild war-torn economies worked fine but it could not meed the needs of the growing world trade and economy. Post Bretton Woods world evolved into a global reserve system adopting the currency of the dominant power at this time, the United States, the dollar. | Journal of Applied Finance Banking vol. 4 no. 1 2014 1-15 ISSN 1792-6580 print version 1792-6599 online Scienpress Ltd 2014 Exorbitant Global Imbalances M Halim Dalgin1 Abstract The Bretton Woods system in the aftermath of the Second World War provided the world economies with a monetary framework to replace the Gold Standard that prevailed in the preceding period. The system to rebuild war-torn economies worked fine but it could not meed the needs of the growing world trade and economy. Post Bretton Woods world evolved into a global reserve system adopting the currency of the dominant power at this time the United States the dollar. In the second half of the 20th century the status of the dollar as the international reserve currency was unchallenged and the United States benefited from this privileged position for which although it had to pay a small price for that as well. In this paper we look at the consequences - mostly economic - this global reserve system in terms of its stability adjustment mechanism and its equity. JEL classification numbers D63 Keywords Schwarz s inequality Triangle inequality 1 Introduction Valery Giscard d Estaing in the 1960s then France s finance minister summarized the dollar s position as exorbitantly privileged see Eichengreen 2011 . Anything that is exorbitantly privileged cannot sustain its position for a long time as the term implies an unstable structure. So that it was as if d Estaing was prophesying the coming troubles of the existing system and the dollar as well. The Bretton Woods institutions brought about by the Second World War could not meet the demand of a fast growing world economy trade and finance. Although after 1971-3 the system was revised and modified it essentially stayed the same and the dollar kept its privileged position whether exorbitantly or not. As the world monetary system hobbled along in the late 70s and 80s more strains and stresses were building into it as a result of economic and political .

• Kinh tế học
• Exorbitant global imbalances
• Monetary framework
• Post Bretton Woods world evolved
• Dominant power
• Global reserve system adopting