NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

G3 Exchange Rate Relationships: A Recap of the Record and a Review of Proposals for Change

Richard H. Clarida

NBER Working Paper No. 7434
Issued in December 1999
NBER Program(s):   IFM

This paper is a recap of G3 exchange rate relationships since the collapse of Bretton Woods and an analysis of recent proposals for changing the way the G3 countries currently conduct exchange rate policy. We seek to understand these proposals in the context of the status quo monetary policies and intervention arrangements that are likely to be pursued by the G3 central banks in the absence of any formal arrangements among their governments to limit exchange rate volatility. The advocates of the proposals for change have made their assessment of the global costs of exchange rate volatility and (their estimates) of exchange rate misalignments, especially as these apply to the emerging economies through their linkages to the global capital markets. In their view, the status quo is unacceptable, and a sustained effort to limit G3 exchange rate fluctuations would deliver benefits to the world economy that would outweigh the value that they place on any loss of monetary autonomy in the G3 that would be required to maintain such a system. The skeptics make a positive, not a normative, judgment that the sorts of proposals that are on the table will not, in practice, get around the impossible trinity' of international finance.

download in pdf format
   (4141 K)

email paper

This paper is available as PDF (4141 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w7434

Published: Group of Thirty Occasional Paper, no. 59 (September 1999).

Users who downloaded this paper also downloaded these:
Obstfeld and Rogoff w5191 The Mirage of Fixed Exchange Rates
Reinhart and Reinhart What Hurts Emerging Markets Most? G3 Exchange Rate or Interest Rate Volatility?
Clarida, Gali, and Gertler w6254 Monetary Policy Rules in Practice: Some International Evidence
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us