The U.S. and the emergence of flexible exchange rates: an analysis of foreign policy change

1979 ◽  
Vol 33 (1) ◽  
pp. 57-81 ◽  
Author(s):  
John S. Odell
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Policy Change ◽  
Exchange Rate Flexibility ◽  
Bretton Woods ◽  
Mixed Regime ◽  
International Monetary Arrangements ◽  
Foreign Policy Change ◽  
Flexible Exchange Rates ◽  
The U.S

International monetary arrangements in effect since the Bretton Woods conference of 1944 underwent major changes in the early 1970s, most notably from the norm and practice of “fixed” exchange rates to a new mixed regime in which major rates are now flexible. The outcome strongly reflected the external monetary behavior of the U.S. government, which changed dramatically with the “Nixon shocks” of August 1971 and again with a second devaluation of the dollar in February 1973. Since then the U.S. has officially advocated the once-heretical policy of exchange-rate flexibility.

Currency Fluctuations in the Post-Bretton Woods Era

1990 ◽  
Vol 4 (1) ◽  
pp. 117-134 ◽  
Author(s):  
Richard Meese
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Developed Countries ◽  
Currency Markets ◽  
Rate System ◽  
Explanatory Variables ◽  
Bretton Woods ◽  
Exchange Rate Changes ◽  
Hybrid Regime ◽  
Flexible Exchange Rates

The international monetary landscape that has emerged since the felling of Bretton Woods is characterized by a hybrid exchange rate system that lies somewhere between the textbook polar cases of a gold standard and a pure float. This system has relatively flexible exchange rates between major countries, active central bank intervention in the market for the major currencies, and predominantly fixed exchange rates (relative to the dollar or to some basket of currencies) for less developed countries and newly industrializing nations. The majority of research on currency markets since the early 1970s has focused on the characteristics of flexible exchange rates under this hybrid regime. My thesis is that this research has been unsuccessful. The proportion of (monthly or quarterly) exchange rate changes that current models can explain is essentially zero. Even after-the-fact forecasts that use actual values (instead of forecasted values) of the explanatory variables cannot explain major currency movements over the post-Bretton Woods era. This result is quite surprising.

scholarly journals Crash Risk in Currency Returns

2018 ◽  
Vol 53 (1) ◽  
pp. 137-170 ◽  
Author(s):  
Mikhail Chernov ◽  
Jeremy Graveline ◽  
Irina Zviadadze
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Exchange Rates ◽  
Empirical Model ◽  
Crash Risk ◽  
Currency Risk ◽  
Jump Risk ◽  
Bilateral Exchange ◽  
The U.S

We develop an empirical model of bilateral exchange rates. It includes normal shocks with stochastic variance and jumps in an exchange rate and in its variance. The probability of a jump in an exchange rate corresponding to depreciation (appreciation) of the U.S. dollar is increasing in the domestic (foreign) interest rate. The probability of a jump in variance is increasing in the variance only. Jumps in exchange rates are associated with announcements; jumps in variance are not. On average, jumps account for 25% of currency risk. The dollar carry index retains these features. Options suggest that jump risk is priced.

Antidumping Investigations and the Pass-Through of Antidumping Duties and Exchange Rates: Reply

2010 ◽  
Vol 100 (3) ◽  
pp. 1283-1284 ◽  
Author(s):  
Bruce A Blonigen ◽  
Stephen E Haynes
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Empirical Evidence ◽  
Structural Breaks ◽  
Theoretical Explanation ◽  
Antidumping Duties ◽  
Pass Through ◽  
Exchange Rate Pass Through ◽  
The U.S

This reply responds to a comment that correctly identifies an invalid assumption in our original article that antidumping (AD) duties are subtracted from the U.S. price when calculating AD duties in administrative reviews. While this point invalidates our theoretical explanation and empirical evidence on the magnitude of AD duty pass-through, it does not affect our original article's theory or empirical evidence on the magnitude of exchange rate pass-through, or the presence of structural breaks in both the AD duty and exchange-rate pass-through coefficients stemming from AD investigations and orders.

Unknown Friedman: The Contribution of Great Monetarist to the Fall of Bretton Woods

2005 ◽  
pp. 83-98 ◽  
Author(s):  
S. Moiseev
Keyword(s):  
United States ◽  
Political Economy ◽  
Exchange Rates ◽  
The United States ◽  
Bretton Woods ◽  
Fixed Exchange Rates ◽  
Political Forces ◽  
The Us ◽  
Primary Focus ◽  
Flexible Exchange Rates

In 1973, the US Treasury Secretary informed the IMF that the United States had moved from system of fixed exchange rates to flexible exchange rates. The fall of the Bretton Woods system became the culmination of the campaign led by M. Friedman during the previous quarter of a century. This publication studies the process by which Friedman's case for flexible exchange rates was transformed from economic "heresy" to the majority academic opinion. The primary focus of the paper is political economy of organization and developing of the intellectual and political forces which undermined the Bretton Woods system.

U.S.-China Exchange Rate Negotiation: Stakeholders' Participation and Strategy Deployment

2011 ◽  
Vol 13 (3) ◽  
pp. 1-23 ◽  
Author(s):  
Emily Yixuan Cao ◽  
Yong Cao ◽  
Rashmi Prasad ◽  
Zhengping Shen
Keyword(s):  
United States ◽  
Exchange Rate ◽  
Exchange Rates ◽  
Domestic Politics ◽  
Historical Review ◽  
The United States ◽  
Negotiation Strategy ◽  
Negotiation Strategies ◽  
The Exchange Rate ◽  
The U.S

Exchange rates influence a country's trading capability, foreign reserves and competitiveness. Recently, the exchange rate between the Chinese RMB and the U.S. dollar has been a contentious issue in both the United States and China. In this paper, we conduct a historical review of how the United States deployed negotiation strategies with China on the exchange rate issue and consider the degree to which it follows theoretical expectations. We then analyze the changing nature of the factors which shape exchange rate negotiations between the two nations in projecting alternative scenarios for the future of conflict resolution between the U.S. and China on this issue. We predict that the U.S. is likely to continue alternating between competition and collaboration, a negotiation cycle influenced by U.S. domestic politics, and China is less likely to continue with accommodation and compromise. The sequencing and timing of each nation's negotiation strategy will lead to widely divergent consequences for the management of exchange rates and the world economy.

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