The Bretton Woods System was created in no small part because of this situation.
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From 1944 to 1973 stability was supplied by the Bretton Woods system of fixed exchange rates.
The recent experience with the Bretton Woods System shows why your model is a bad idea.
It was known as the Bretton Woods system and it helped stabilize the currencies of participating countries.
Up until the 1970s, when the Bretton Woods system of fixed exchange rates broke down, these were common.
Your analysis of the Bretton Woods System (BWS) and the role of gold in it is completely wrong.
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They were cutting taxes every year, and kept the yen pegged to gold via the Bretton Woods system.
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Robert Triffin was reacting to some genuine problems in the Bretton Woods system.
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The idea of having masses of reserves is partly a hangover from the Bretton Woods system of pegged exchange rates.
The similarities between this quasi-dollar standard and the original Bretton Woods system mean that many of today's problems have historical parallels.
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After the Bretton Woods system collapsed in 1971, trade imbalances ceased to be much of a constraint on the developed world.
European leaders say they are ready for serious talks on a new world financial architecture to replace the Bretton Woods system.
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Under a Bretton Woods system, the monetary base consists of fiat dollars (both currency and bank reserves) created by the Federal Reserve.
When the Bretton Woods system ended in 1971, the United States had run a current account surplus every year since 1960.
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The post-war period of financial repression occurred under the Bretton Woods system of fixed exchange rates, which was marked by tight capital controls.
However, in 1971 under President Richard Nixon, the Bretton Woods system collapsed and the major currencies shifted to a floating exchange rate regime.
The third basic type of gold standard could be called the Bretton Woods system (after the monetary system that was used from 1948 to 1971).
That was the path taken in the early 1970s, when the D-mark rose after the collapse of the Bretton Woods system of fixed exchange rates.
Governments were helped in keeping rates down because of the capital controls they ran as part of the Bretton Woods system of fixed exchange rates.
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Countries couldn't use competitive devaluation under the Bretton Woods system.
Keynes who was the principal author of the Bretton Woods system.
James Tobin, an American economist, first proposed a tax on cross-border capital flows in 1972, amid the collapse of the Bretton Woods system of fixed exchange rates.
Yet, instead of delving into how the Bretton Woods system did so well, the authors search instead for how those in power can better manage the current non-system.
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After the collapse of the Bretton Woods system of fixed exchange rates in 1971 the Federal Reserve allowed the money supply to increase at 12% a year or more.
Capital controls worked under the Bretton Woods system but it is not clear whether they can be enforced in an age where money can be transferred through the click of a mouse.
The actual Bretton Woods system failed because the Fed did not manage the size of the monetary base so as to keep the free market price of gold equal to the official price.
Under the original Bretton Woods system, Mr McKinnon points out, America borrowed on a short-term basis from Europe, but lent long, making enormous direct investments in the rebuilding of Europe's war-blasted capital stock.
So the most recent, tiny remnant of the old gold standard (the Bretton Woods System only applied to international exchanges, it had no domestic impact on the US or other nations) did indeed collapse for exactly the problem of the supply of gold.
The problem that the Bretton Woods System was attempting to address was a lack of US dollars outside of the US. Following WW II, with the economies of the rest of the world in shambles, a great many countries needed to trade with the US. How could foreign countries trade with the US if they did not have dollars?
Despite their differences conservatives and libertarians are united in opposition to the Bretton Woods type system.
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