The revived Bretton Woods system

Abstract

The economic emergence of a fixed exchange rate periphery in Asia has re-established the United States as the centre country in the Bretton Woods international monetary system. We argue that the normal evolution of the international monetary system involves the emergence of a periphery for which the development strategy is export-led growth supported by undervalued exchange rates, capital controls and official capital outflows in the form of accumulation of reserve asset claims on the centre country. The success of this strategy in fostering economic growth allows the periphery to graduate to the centre. Financial liberalization, in turn, requires floating exchange rates among the centre countries. But there is a line of countries waiting to follow the Europe of the 1950s|60s and Asia today, sufficient to keep the system intact for the foreseeable future. Copyright © 2004 John Wiley & Sons, Ltd.

The Impact of Economic Factors on the Foreign Exchange Rates between USA and Four Big Emerging Countries: China, India, Brazil and Mexico

“…As Rangarajan & Prased (2008) stated "with an open economy and large capital inflows, management of the exchange rate becomes an independent concern." The U.S. could be regarded as the center country for the international monetary system (Dooley, Folkerts-Landau, & Garber, 2004).…”

The external and domestic side of macroeconomic adjustment in China

“…The findings are, however, not unanimous, and neither is the recommendation to appreciate the nominal exchange rate (e.g., McKinnon, 2007;Dooley et al, 2004). This is not surprising given that the challenges, which are already considerable when it comes to assess equilibrium exchange rates of advanced economies that are traded in deep and liquid markets, are manifold in the context of an emerging economy with a short data record that is engaged in a fundamental transition process, underlying rapid technological adaptation and characterised by massive regional inequalities.…”

Accumulation of large foreign reserves in China: a behavioural perspective

“…In their explanation of the mercantilism motive, Dooley, Folkerts-Landau, and Garber (2004) state that reserve accumulation can be understood as the direct consequence of export-oriented policies implemented by most East Asian countries, particularly China, in order to achieve their aims of creating more jobs and maintaining economic growth through promoting exports.…”