Publication: Reshaping the International Monetary Architecture: Lessons from the Keynes Plan
Abstract
As we witness profound turmoil in the global economy, and as it becomes apparent that the so-called "Revived Bretton Woods System" might be nothing more than a temporary non sustainable financing of the US structural imbalance favored by the global role of the dollar, which has increased the overall vulnerability of the global financial architecture, it's worth revisiting the origins of the Bretton Woods conference, and pointing out the relevance for today's framework of Keynes' original 1942 plan for an International Clearing Union. In this note we explore the main characteristics of Keynes' original plan, by revisiting his original writings between 1940 and 1944, and we outline its relevance to the current debate on the international financial architecture. We'll argue that reforms of the international financial architecture should include anchoring the international monetary system on sounder institutional ground.
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Publication Reshaping the International Monetary Architecture : Lessons from Keynes’ Plan(2009-08-01)As the global economy undergoes profound changes, it is becoming apparent that the so-called "Revived Bretton Woods System" has increased the overall vulnerability of the global financial architecture. Therefore, it is worth revisiting the origins of the Bretton Woods conference, and pointing out the relevance for today s framework of Keynes original 1942 plan for an International Clearing Union. This note explores the main characteristics of Keynes' original plan, by revisiting his original writings between 1940 and 1944, and outlining its relevance to the current debate on the international financial architecture. The note suggests that reforms of the international financial architecture should include anchoring the international monetary system on sounder institutional ground.Publication An Institutional Approach to Balancing International Monetary Relations : The Case for a US-China Settlement Facility(World Bank, Washington, DC, 2010-01)Management of international monetary relations between China and the United States will be one of the crucial parameters for the stability or instability of the global financial system in the next decade. Although most of the literature suggests rebalancing through either adjustment of relative prices or adjustment of behavior in both countries, this paper explores an institutional approach to rebalancing. Applying the lessons from Keynes' 1944 plan for a United States-United Kingdom international clearing union, the paper explores the creation of a bilateral United States-China settlement facility as an institutional contribution to the structural rebalancing of global imbalances.Publication From Disintegration to Reintegration : Eastern Europe and the Former Soviet Union in International Trade(Washington, DC: World Bank, 2005)As the world marketplace becomes ever more globalized, much is at stake for the prosperity of hundreds of millions of people in Europe and Central Asia as the region's transition process continues through its second decade. Understanding the underlying dynamics shaping the contours and most salient impacts of international integration that have emerged-and likely to emerge prospectively-in the region is thus a crucial challenge for the medium term economic development agenda, not only for policymakers in the countries on themselves, but also for their trading partners, the international financial institutions, the donor community and the future of the world trading system as a whole.Publication Governance of Public Pension Funds : Lessons from Corporate Governance and International Evidence(World Bank, Washington, DC, 2003-08)An understanding of corporate governance theory can promote the adoption of appropriate governance tools to limit agency problems in public pension fund management. The absence of a market for corporate control hinders the translation of lessons from the private sector corporate world to public pension governance. The establishment of a fit, and proper governing body for public pension funds, thus may be even more important than the maintenance of a comparable body for private sector corporations. In particular, behavioral controls should be carefully designed.Publication The New Multi-polar International Monetary System(2009-12-01)Backed by rapid economic growth, growing financial clout, and a newfound sense of assertiveness in recent years, the BRIC countries - Brazil, Russia, India, and China - are a driving force behind an incipient transformation of the world economy away from a US-dominated system toward a multipolar one in which developing countries will have a major say. It is, however, in the international monetary arena that the notion of multipolarity - more than two dominant poles - commands renewed attention and vigorous debate. For much of its history, the quintessential structural feature of the international monetary system has been unipolarity - as American hegemony of initiatives and power as well as its capacity to promote a market-based, liberal order came to define and shape international monetary relations. As other currencies become potential substitutes for the US dollar in international reserves and in cross-border claims, exchange rate volatility may become more severe. There are also risks that the rivalry among the three economic blocs may spill over into something more if not kept in check by a strong global governance structure. While the transition will be difficult and drawn out, governments should take immediate steps to prevent financial volatility by enhancing cooperation on monetary policies, currency market intervention and financial regulation.
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