Economic Paper

2310-1385 (online)
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This series examines current economic issues from a Commonwealth perspective. The titles in the series are technical papers of topical interest to specialists concerned with trade, micro and macroeconomics, development economics and related subjects.
International Monetary Reforms

International Monetary Reforms

In Retrospect and Prospect You do not have access to this content

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I. S. Gulati
01 Jan 1977
9781848592599 (PDF)
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  • Preface

    The reform of the international monetary system has been under debate for more than a decade. The inherent deficiencies and contradictions of the system established at Bretton Woods have been well understood and documented even before this? but the international political will to undertake necessary structural change could not be mobilised. Instead a series of patch work modifications kept the system in operation, albeit not very effectively, until the action taken by the United States in 1971 removed its essential underpinnings.

  • International Monetary Reforms

    This paper is divided into three parts. In the first part the working of the monetary system that was set up after World War II is reviewed in order to highlight the factors which eventually brought about its collapse. In the second part are taken up the major elements of the new monetary system that is sought to be put in place.

  • The Par Value System: Its Working and Collapse

    It was the agreement reached at Bretton Woods in 1944 that governed the international monetary relations since the end of World War II. Under this agreement, each member country undertook to maintain the par value of its currency in terms of gold or the U.S. dollar so that until the par value of currency was changed its exchange rates with other currencies remained fixed. Variations of upto 1% on either side were only allowed.

  • The Jamaica Agreement

    International Exchange arrangements that have been operating since March 1973 were stop-gap arrangements meant to fill the void created by the collapse of the par value system. The dominant characteristic of these exchange arrangements has generally been described as managed floating under which monetary authorities of the floating currencies intervened in the exchange market. Still as the IMF Annual Report 1975 points out, very short-term movements in exchange rates have been quite sharp and erratic on a number of occasions, during the past three years.

  • Agenda for the Future

    What is it that remains to be done now that the new monetary system, as the U.S. Treasury Secretary William Simon called it, has been ushered in?

  • Notes and References
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