Is This the End of Bretton Woods?

Abstract

In the flood of comments that followed Mr Nixon’s statement there was hardly any point on which a high proportion of commentators agreed. There was, however, one point on which there was virtual unanimity — that 15 August marked the end of the Bretton Woods system. As far as I know, the only dissenting voice was mine. I was firmly convinced that our return to the Bretton Woods system — subject to relatively major alterations — was only a question of time. Its restoration may take months or it may take years. But sooner or later the untidy situation created by the abandonment of stability would be tidied up. If by ‘Bretton Woods’ we mean the exact system laid down under the rules of the IMF, it may be correct to say that it will never return again. There are bound to be far-reaching changes. But to my mind ‘Bretton Woods’ stands for monetary stability. And I was firmly convinced that we would witness its return.