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Anniversary of the End of Bretton Woods Sees Resilient Dollar and Firmer US Rates: Can it Persist?
Tuesday marks the 52nd anniversary of the end of Bretton Woods currency arrangement, which pegged the dollar to gold and other currencies to the dollar. Some economists have tried framing their views in terms of Bretton Woods II and there have even been proponents of Bretton Woods III, but these are informal arrangements at best, no reciprocity, or mutual obligations. The point of the matter is that the end of Bretton Woods ushered in the modern era of floating currencies, which in practice has meant volatile exchange rates. One of the big picture ideas from international relations is hegemonic stability theory. It ... (full story)