The emergence and persistence of large trade imbalances, as well as the volatility of financial flows among countries, has been attributed, at least in part, to the inadequacy of the current international monetary system after the breakdown of Bretton Woods. On a different perspective, the current Euro zone crisis is also the result, in our view, of a flawed institutional setting. These problems are calling for reforms which would temper or avoid the recessionary bias which is the outcome of current systems, as Keynes predicted in the discussion preceding the Bretton Woods agreements. In this paper we briefly review the evidence on international imbalances, and survey the rapidly growing literature on the subject, and we then introduce a set of models based on the stock-flow-consistent approach pioneered by Godley (1999) and Lavoie – Godley (2003). We discuss how to use these models to explore potential reforms of the international monetary system.
Reforming the International Monetary System. A stock-flow-consistent approach
ZEZZA, Gennaro
2012-01-01
Abstract
The emergence and persistence of large trade imbalances, as well as the volatility of financial flows among countries, has been attributed, at least in part, to the inadequacy of the current international monetary system after the breakdown of Bretton Woods. On a different perspective, the current Euro zone crisis is also the result, in our view, of a flawed institutional setting. These problems are calling for reforms which would temper or avoid the recessionary bias which is the outcome of current systems, as Keynes predicted in the discussion preceding the Bretton Woods agreements. In this paper we briefly review the evidence on international imbalances, and survey the rapidly growing literature on the subject, and we then introduce a set of models based on the stock-flow-consistent approach pioneered by Godley (1999) and Lavoie – Godley (2003). We discuss how to use these models to explore potential reforms of the international monetary system.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.