Robert Triffin

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Robert Triffin (5 October 1911, Flobecq, Belgium – 23 February 1993, Ostend, Belgium) was a Belgian economist best known for his critique of the Bretton Woods system of fixed currency exchange rates. His critique became known later as Triffin's dilemma.

Life[edit]

Triffin received his doctorate degree (Ph.D.) from Harvard University in 1938 and taught there from 1939 until 1942. He held positions in the US Federal Reserve System (1942–1946), the International Monetary Fund (1946–1948), and the Organisation for European Economic Co-operation (1948–1951), now the OECD. In 1951, he became a professor of economics at Yale University.

Triffin became a U.S. citizen in 1942. He reclaimed his Belgian citizenship in 1977 and returned to reside in Europe. There, he was a staunch supporter of European integration and helped to develop the European Monetary System and supported the concept of a central bank, which developed as the European Central Bank.

Bretton Woods critique[edit]

In 1960, Triffin testified before the United States Congress warning of serious flaws in the Bretton Woods system. His theory was based on observing the dollar glut, or the accumulation of the United States dollar outside of the US. Under the Bretton Woods system, the US had pledged to convert dollars into gold, but by the early 1960s the glut had caused more dollars to be available outside the US than gold was in its Treasury. As a result, the US had to run deficits on the current account of the balance of payments[1] to supply the world with dollar reserves that kept liquidity for their increased wealth.

However, running the deficit on the current account of the balance of payments in the long term would erode confidence in the dollar. He predicted the result that the system would not maintain both liquidity and confidence, a theory later to be known as the Triffin dilemma. His idea was largely ignored until 1971, when his hypothesis became reality, forcing US President Richard Nixon to halt convertibility of the United States dollar into gold, an event with consequences known as the Nixon Shock), which effectively ended the Bretton Woods System.

A fundamental reform of the international monetary system has long been overdue. Its necessity and urgency are further highlighted today by the imminent threat to the once mighty U.S. dollar.

— Robert Triffin[2]

Bibliography[edit]

  • Monopolistic Competition and General Equilibrium Theory, 1940.
  • "National central banking and the international economy", 1947, Board of Governors, Federal Reserve System.
  • Europe and the Money Muddle, 1957.
  • Gold and the Dollar Crisis: The future of convertibility, 1960.
  • Statistics of Sources and Uses of Finance, 1948-1958, with Stuvel et al., 1960.
  • "Intégration économique européenne et politique monetaire", 1960, Revue Econ Politique
  • The Evolution of the International Monetary System: historical appraisal and future perspectives, 1964.
  • The World Money Maze: National currencies in international payments, 1966.
  • Our International Monetary System: Yesterday, today and tomorrow, 1968.
  • "The Thrust of History in International Monetary Reform", 1969, Foreign Affairs
  • "The Use of SDR Finance for Collectively Agreed Purposes", BNLQR
  • "The international role and fate of the dollar", 1978, Foreign Affairs
  • "The European Monetary System: Tombstone or cornerstone?", in: The international monetary system: forty years after Bretton Woods. Proceedings of a conference held at Bretton Woods, N.H., May 1984, 1984
  • "The future of the European Monetary System and the ECU", 1984, CEPS Papers
  • " The international accounts of the United States and their impact upon the rest of the world", 1985, BNLQR
  • "Une Banque Monétaire Européenne avec des fonctions de banque centrale, 1986, Répères, Bulletin Économique et Financier
  • "L’avenir du système monétaire et financier international : gestion de crises chroniques ou réformes fondamentales?, 1986, Répères, Bulletin Économique et Financier
  • "The IMS (International Monetary System... or Scandal?) and the EMS (European Monetary System)", 1987, BNLQR
  • "The European Monetary System in the World Economy", 1989, Rivista di politica economica"
  • "L’interdépendance du politique et de l’économique dans le scandale monétaire mondial : diagnostic et prescription", 1989, Répères, Bulletin Économique et Financier
  • "The International Monetary System : 1949-1989", 1990, ECU Newsletter Torino.

Honors[edit]

See also[edit]

References[edit]

  1. ^ Wolf, M. 'Do we need a reserve currency'. http://www.business24-7.ae/Articles/2009/12/Pages/26122009/12272009_b60d075ae8834ca981282abc0ee85802.aspx. Accessed 4 January 2010
  2. ^ "System in Crisis (1959-1971)". Money Matters: An IMF Exhibit -- The Importance of Global Cooperation. International Monetary Fund. Retrieved 6 April 2006.