Global Imbalances and the Lessons of Bretton Woods (Cairoli Lectures)

MIT Press, 2010. Paperback. Very Good. A copy that has been read, but is in excellent condition. Pages are intact and not marred by notes or highlighting. The spine remains undamaged. Why the current Bretton Woods-like international financial system, featurin g large current account deficits in the center country, the United States, and massive reserve accumulation by the periphery, is not sustainable. In Global Imbalances and the Lessons of Bretton Woods, Barry Eichengreen ta kes issue with the argument that today's international financial system is largely analogous to the Bretton Woods System of the period 1958 to 1973. T hen, as now, it has been argued, the United States ran balance of payment d eficits, provided international reserves to other countries, and acted as e xport market of last resort for the rest of the world. Then, as now, the st ory continues, other countries were reluctant to revalue their currencies f or fear of seeing their export-led growth slow and suffering capital losses on their foreign reserves. Eichengreen argues in response that the power o f historical analogy lies not just in finding parallels but in highlighting differences, and he finds important differences in the structure of the wo rld economy today. Such differences, he concludes, mean that the current co nstellation of exchange rates and payments imbalances is unlikely to last a s long as the original Bretton Woods System. Two of the most salient differences are the twin deficits and low savings rate of the United States, which do not augur well for the sustainability of the country's international position. Such differences, he concludes, mean that the current constellation of ex.