50 years after Bretton Woods: what is the future for the international monetary system?

On March 18, 1994, the Eastern Economic Association sponsored a roundtable discussion at the Federal Reserve Bank of Boston, to examine the future of the international monetary system in light of the aims of the Bretton Woods agreement of 1944. The title of the roundtable captured the central concern of each speaker: to what extent can the ideals of the founders of the Bretton Woods system be implemented today? ; It was agreed that a return to a fixed-rate system, as envisioned by the founders of the Bretton Woods system, is not possible today given the changes in underlying economic conditions since that time, in particular, the high degree of integration of financial markets. Each speaker examined the damaging effects of fiscal imbalance and volatility on current exchange rate regimes and on the world economy. To limit volatility, some recommended improving domestic fiscal policy while others emphasized the need for stronger institutional arrangements internationally. This article offers an overview of each speaker's remarks and of the discussion that followed.