2008 G20 Washington summit: Difference between revisions
compromise -- reduces mention of LaRouche, but includes "Corriere" citation and actual date the term was first used |
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"'''Bretton Woods II'''" is a term used by media<ref>{{cite web |
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|url=http://www.ft.com/cms/s/0/7cc16b54-9b19-11dd-a653-000077b07658.html |
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|title=European call for 'Bretton Woods II' |
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|author=George Parker, Tony Barber and Daniel Dombey |
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|date=October 16, 2008 |
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| ⚫ | }}</ref> to describe a proposed international summit tasked with overhauling the globe’s financial structure. The name refers to the [[Bretton Woods system]] of monetary management which was instituted after [[World War II]]. The meeting could occur as early as November 2008 in [[New York City]].<ref>{{cite web |
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|url=http://www.ft.com/cms/s/0/7cc16b54-9b19-11dd-a653-000077b07658.html |
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|title=European call for 'Bretton Woods II' |
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|author=Eurodad |
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|date=October 16, 2008 |
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}}</ref> |
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==History== |
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Calls for a new Bretton Woods began surfacing as early as 1997.<ref>Schiller Institute statement, [http://www.schillerinstitute.org/economy/nbw/nbw.html#intro "A New Bretton Woods,"] Schiller Institute website</ref> Some have called for a return to the fixed exchange rates and other features of the original Bretton Woods System, while others have called for an entirely different approach, but with the name "New Bretton Woods."<ref>Press release, [http://www.schillerinstitute.org/economy/nbw/nbw_rohatyn.html#larouche%20challenges "LaRouche Issues Challenge To Banker Felix Rohatyn,"] [[August 24]], [[2004]]</ref> |
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<ref>{{cite web|url=http://afp.google.com/article/ALeqM5iqbjATskwxNr2tyDViM7bbz8J_rg|title=World needs new Bretton Woods, says Brown|author=Agence France-Presse (AFP)|date=October 13, 2008}}</ref> |
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|url=http://www.eurodad.org/whatsnew/articles.aspx?id=2988 |
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| ⚫ | '''Bretton Woods II''' was an informal designation for the system of currency relations which developed during the 2000s. As described by political economist Daniel Drezner, "Under this system, the U.S. is running massive current account deficits to be the source of export-led growth for other countries. To fund this deficit, central banks, particularly those on the Pacific Rim, are buying up dollars and dollar-denominated assets."<ref>{{cite web |
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|title=Senior figures call for new Bretton Woods ahead of Bank/Fund meetings |
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|author=George Parker, Tony Barber and Daniel Dombey |
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|date=October 9, 2008 |
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}}</ref> |
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|url=http://afp.google.com/article/ALeqM5iqbjATskwxNr2tyDViM7bbz8J_rg |
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| ⚫ | The notion of a "revived Bretton Woods system" was introduced in a 2003 paper by Dooley, Folkerts-Landau, and Garber, in which it is described as arising after the end of the Cold War, out of the choice of countries, {{quote|mainly in Asia, [which] chose the same periphery strategy as immediate post-war Europe and Japan, undervaluing the exchange rate, managing sizable foreign exchange interventions, imposing controls, accumulating reserves, and encouraging export-led growth by sending goods to the competitive center countries.<ref>{{cite web |
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|title=World needs new Bretton Woods, says Brown |
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|author=Agence France-Presse (AFP) |
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|date=October 13, 2008 |
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}}</ref> However, Brown's approach is quite different than the original Bretton Woods System, emphasizing the continuation of [[globalization]] and [[free trade]] as opposed to a return to fixed exchange rates.<ref>[http://www.egovmonitor.com/node/21484]</ref> |
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On October 20, [[Italy|Italian]] Economics Minister [[Giulio Tremonti]] told the Italian daily [[Corriere della Sera]] that the New Bretton Woods which he supports came originally from the "U.S. political guru Lyndon LaRouche, the historic enemy of financial speculation and deregulation." |
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<ref>Caizzi, Ivo, "Bretton Woods #2 of LaRouche and Tremonti,"[http://www.corriere.it/edicola/economia.jsp?path=TUTTI_GLI_ARTICOLI&doc=IVO2], [[Corriere della Sera]], October 20, 2008 -- Google translation [http://translate.google.com/translate?hl=en&sl=it&u=http://www.corriere.it/edicola/economia.jsp%3Fpath%3DTUTTI_GLI_ARTICOLI%26doc%3DIVO2&sa=X&oi=translate&resnum=1&ct=result&prev=/search%3Fq%3Dlarouche%2Bsite:www.corriere.it%26hl%3Den%26sa%3DG]</ref> |
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| ⚫ | '''Bretton Woods II''' was an informal designation for the system of currency relations which developed during the 2000s. As described by political economist Daniel Drezner, "Under this system, the U.S. is running massive current account deficits to be the source of export-led growth for other countries. To fund this deficit, central banks, particularly those on the Pacific Rim, are buying up dollars and dollar-denominated assets."<ref>{{cite web |
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|url=http://www.danieldrezner.com/archives/001912.html |
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|title=How Stable Is Bretton Woods 2? |
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|author=Daniel Drezner |
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|date=February 24, 2005 |
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}}</ref> |
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| ⚫ | The notion of a "revived Bretton Woods system" was introduced in a 2003 paper by Dooley, Folkerts-Landau, and Garber, in which it is described as arising after the end of the Cold War, out of the choice of countries, {{quote|mainly in Asia, [which] chose the same periphery strategy as immediate post-war Europe and Japan, undervaluing the exchange rate, managing sizable foreign exchange interventions, imposing controls, accumulating reserves, and encouraging export-led growth by sending goods to the competitive center countries.<ref>{{cite web |
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|url=http://www.nber.org/papers/w9971 |
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|title=An Essay on the Revived Bretton Woods System |
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|author= Michael P. Dooley, David Folkerts-Landau, Peter Garber |
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|date=September 2003 |
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}}</ref>}} |
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In 2005, [[Nouriel Roubini|Roubini]] and [[Brad Setser|Setser]] argued that the system is unsustainable: |
In 2005, [[Nouriel Roubini|Roubini]] and [[Brad Setser|Setser]] argued that the system is unsustainable: |
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{{quote|If the US does not take policy steps to reduce its need for external financing before it exhausts the world’s central banks willingness to keep adding to their dollar reserves – and if the rest of the world does not take steps to reduce its dependence on an unsustainable expansion in US domestic demand to support its own growth – the risk of a hard landing for the US and global economy will grow. The basic outlines of a hard landing are easy to envision: a sharp fall in the value of the US dollar, a rapid increase in US long-term interest rates and a sharp fall in the price of a range of risk assets including equities and housing. The asset price adjustment would lead to a severe slowdown in the US, and the fall in US imports associated with the US slowdown and the dollar’s fall would lead to a global severe economic slowdown, if not an outright recession.<ref>{{cite web|url=http://www.stern.nyu.edu/~nroubini/papers/BW2-Unraveling-Roubini-Setser.pdf|title=Will the Bretton Woods 2 Regime Unravel Soon? The Risk of a Hard Landing in 2005-2006 |author= Nouriel Roubini, Brad Setser|date=February 2005}}</ref>}} |
{{quote|If the US does not take policy steps to reduce its need for external financing before it exhausts the world’s central banks willingness to keep adding to their dollar reserves – and if the rest of the world does not take steps to reduce its dependence on an unsustainable expansion in US domestic demand to support its own growth – the risk of a hard landing for the US and global economy will grow. The basic outlines of a hard landing are easy to envision: a sharp fall in the value of the US dollar, a rapid increase in US long-term interest rates and a sharp fall in the price of a range of risk assets including equities and housing. The asset price adjustment would lead to a severe slowdown in the US, and the fall in US imports associated with the US slowdown and the dollar’s fall would lead to a global severe economic slowdown, if not an outright recession.<ref>{{cite web |
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|url=http://www.stern.nyu.edu/~nroubini/papers/BW2-Unraveling-Roubini-Setser.pdf |
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|title=Will the Bretton Woods 2 Regime Unravel Soon? The Risk of a Hard Landing in 2005-2006 |
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|author= Nouriel Roubini, Brad Setser |
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|date=February 2005 |
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}}</ref>}} |
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==See also== |
==See also== |
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Revision as of 12:58, 23 October 2008
"Bretton Woods II" is a term used by media[1] to describe a proposed international summit tasked with overhauling the globe’s financial structure. The name refers to the Bretton Woods system of monetary management which was instituted after World War II. The meeting could occur as early as November 2008 in New York City.[2]
History
Calls for a new Bretton Woods began surfacing as early as 1997.[3] Some have called for a return to the fixed exchange rates and other features of the original Bretton Woods System, while others have called for an entirely different approach, but with the name "New Bretton Woods."[4]
On September 26, 2008, French, and current European Union president, Nicolas Sarkozy, said, "we must rethink the financial system from scratch, as at Bretton Woods.”[5]
On October 13, 2008, British Prime Minister Gordon Brown said world leaders must meet to agree to a new economic system. "We must have a new Bretton Woods, building a new international financial architecture for the years ahead."[6] However, Brown's approach is quite different than the original Bretton Woods System, emphasizing the continuation of globalization and free trade as opposed to a return to fixed exchange rates.[7]
On October 20, Italian Economics Minister Giulio Tremonti told the Italian daily Corriere della Sera that the New Bretton Woods which he supports came originally from the "U.S. political guru Lyndon LaRouche, the historic enemy of financial speculation and deregulation." [8]
Previous informal usage
Bretton Woods II was an informal designation for the system of currency relations which developed during the 2000s. As described by political economist Daniel Drezner, "Under this system, the U.S. is running massive current account deficits to be the source of export-led growth for other countries. To fund this deficit, central banks, particularly those on the Pacific Rim, are buying up dollars and dollar-denominated assets."[9]
History of the informal usage
The notion of a "revived Bretton Woods system" was introduced in a 2003 paper by Dooley, Folkerts-Landau, and Garber, in which it is described as arising after the end of the Cold War, out of the choice of countries,
mainly in Asia, [which] chose the same periphery strategy as immediate post-war Europe and Japan, undervaluing the exchange rate, managing sizable foreign exchange interventions, imposing controls, accumulating reserves, and encouraging export-led growth by sending goods to the competitive center countries.[10]
In 2005, Roubini and Setser argued that the system is unsustainable:
If the US does not take policy steps to reduce its need for external financing before it exhausts the world’s central banks willingness to keep adding to their dollar reserves – and if the rest of the world does not take steps to reduce its dependence on an unsustainable expansion in US domestic demand to support its own growth – the risk of a hard landing for the US and global economy will grow. The basic outlines of a hard landing are easy to envision: a sharp fall in the value of the US dollar, a rapid increase in US long-term interest rates and a sharp fall in the price of a range of risk assets including equities and housing. The asset price adjustment would lead to a severe slowdown in the US, and the fall in US imports associated with the US slowdown and the dollar’s fall would lead to a global severe economic slowdown, if not an outright recession.[11]
See also
References
- ^ George Parker, Tony Barber and Daniel Dombey (October 16, 2008). "European call for 'Bretton Woods II'".
- ^ Eurodad (October 16, 2008). "European call for 'Bretton Woods II'".
- ^ Schiller Institute statement, "A New Bretton Woods," Schiller Institute website
- ^ Press release, "LaRouche Issues Challenge To Banker Felix Rohatyn," August 24, 2004
- ^ George Parker, Tony Barber and Daniel Dombey (October 9, 2008). "Senior figures call for new Bretton Woods ahead of Bank/Fund meetings".
- ^ Agence France-Presse (AFP) (October 13, 2008). "World needs new Bretton Woods, says Brown".
- ^ [1]
- ^ Caizzi, Ivo, "Bretton Woods #2 of LaRouche and Tremonti,"[2], Corriere della Sera, October 20, 2008 -- Google translation [3]
- ^ Daniel Drezner (February 24, 2005). "How Stable Is Bretton Woods 2?".
- ^ Michael P. Dooley, David Folkerts-Landau, Peter Garber (September 2003). "An Essay on the Revived Bretton Woods System". National Bureau of Economic Research.
{{cite web}}: CS1 maint: multiple names: authors list (link) - ^ Nouriel Roubini, Brad Setser (February 2005). "Will the Bretton Woods 2 Regime Unravel Soon? The Risk of a Hard Landing in 2005-2006" (PDF).
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