Monetary Reform — Where Do The Problems Go When They’re Assumed Away?

Abstract

A paradox of the last several decades has been the glaring contrast between the problems of the system — the foreign exchange crises and the threats to the domestic banking systems and the trade disputes — and all the good advice in the editorials of The New York Times and The Economist, in congressional testimony, in international conferences of economists and bankers, in the policy papers produced by the thinktanks in Washington and London and Tokyo, and even in university lectures. Salvation was readily available. The system’s problems would be solved if central banks intervened in the foreign exchange market to support their currencies, or if they refrained from such intervention, if there were more coordination of national monetary policies, or if national currencies were eliminated. Or if …