International Monetary Systems
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| The International Gold Standard (1879-1913) | Fix an official gold price or "mint parity" and allow free convertibility between domestic money and gold at that price. |
| The International Gold Standard (1879-1913) | Impose no restrictions on the import or export of gold by private citizens, or on the use of gold for international transactions. |
| The International Gold Standard (1879-1913) | Issue national currency and coins only with gold backing, and link the growth in national bank deposits to the availability of national gold reserves. |
| The International Gold Standard (1879-1913) | In the event of a short-run liquidity crisis associated with gold outflows, the central bank should lend freely to domestic banks at higher interest rates (Bagehot's Rule). |
| The International Gold Standard (1879-1913) | If "mint parity" is temporarily suspended, restore convertibility at the original mint parity as soon as practical. |
| The International Gold Standard (1879-1913) | The worldwide price level will be endogenously determined based on the overall world demand and supply of gold. |
| The Spirit of the Bretton Woods Agreement (1945) | Fix an official par value for domestic currency in terms of gold or a currency tied to gold as a numeraire. |
| The Spirit of the Bretton Woods Agreement (1945) | In the short run, keep the exchange rate pegged within 1 percent of its par value, but in the long-run leave open the option to adjust the par value unilaterally if the IMF concurs. |
| The Spirit of the Bretton Woods Agreement (1945) | Permit free convertibility of currencies for current account transactions, but use capital controls to limit currency speculation. |
| The Spirit of the Bretton Woods Agreement (1945) | Offset short-run balance of payments imbalances by use of official reserves and IMF credits, and sterilize the impact of exchange rate market interventions on the domestic money supply. |
| The Spirit of the Bretton Woods Agreement (1945) | Permit national macroeconomic autonomy; each member pursues its own price level and employment objectives. |
| The Fixed-Rate Dollar Standard (1950-1970) | Fix an official par value for domestic currency in terms of the U.S. Dollar, and keep the exchange rate within 1 percent of this par value indefinitely. |
| The Fixed-Rate Dollar Standard (1950-1970) | Permit free convertibility of currencies for current account transactions; use capital controls to insulate domestic financial markets, but begin liberalization. |
| The Fixed-Rate Dollar Standard (1950-1970) | Use the U.S. Dollar as the intervention currency and keep official reserves in U.S. Treasury bonds. |
| The Fixed-Rate Dollar Standard (1950-1970) | Elevate the importance of mantaining the fixed exchange rate; make domestic monetary policy subordinate to this target as well as to the price level of traded goods in the United States. |
| The Fixed-Rate Dollar Standard (1950-1970) | Limit current account imbalances by adjusting national fiscal policy (government expenditures minus tax revenues) to offset imbalances between private savings and investment. |
| The Fixed-Rate Dollar Standard (1950-1970) | (U.S.) Remain passive in the foreign exchange market; practice free trade without a balance of payments or exchange rate target. |
| The Fixed-Rate Dollar Standard (1950-1970) & The Floating-Rate Dollar Standard (1973-1984) | (U.S.) Keep capital markets open for borrowing and investing by private residents and foreign sovereigns. |
| The Fixed-Rate Dollar Standard (1950-1970) | (U.S.) Maintain an international creditor position in dollar denominated assets, and limit fiscal deficits. |
| The Fixed-Rate Dollar Standard (1950-1970) | (U.S.) Pursue an independent monetary policy that establishes a stable price level for tradable goods. |
| The Floating-Rate Dollar Standard (1973-1984) | Smooth short-term variability in the dollar exchange rate, but do not commit to an official par value or to long-term exchange rate stability. |
| The Floating-Rate Dollar Standard (1973-1984) | Permit free convertibility of currencies for current account transactions, while endeavoring to eliminate all remaining restrictions on capital account transactions. |
| The Floating-Rate Dollar Standard (1973-1984) | Use the U.S. Dollar as the intervention currency (except for transactions to stabilize European exchange rates) and keep official reserves primariliy in U.S. Treasury bonds. |
| The Floating-Rate Dollar Standard (1973-1984) | Modify domestic monetary policy to support major exchange rate interventions, reducing the money supply when the national currency is weak against the dollar and expanding the money supply when the national currency is strong. |
| The Floating-Rate Dollar Standard (1973-1984) | Set long-run national monetary and price level targets independently of the United States; let the exchange rate adjust over the long run to offset these differences. |
| The Floating-Rate Dollar Standard (1973-1984) | (U.S.) Remain passive in the foreign exchange market; practice free trade without a balance of payments or exchange rate target. No need for sizable official foreign exchange reserves. |
| The Fixed-Rate Dollar Standard (1950-1970) & The Floating-Rate Dollar Standard (1973-1984) | (U.S.) Keep capital markets open for borrowing and investing by private residents and foreign sovereigns. |
| The Floating-Rate Dollar Standard (1973-1984) | (U.S.) Pursue a monetary policy independent of the exchange rate policies in other countries, thereby not striving for a common, stable price level (or anchor) for tradable goods. |
| The Plaza-Louvre Intervention Accords and the Floating-Rate Dollar Standard (1985-1996) | (G-3) Set broad target zones for the $/DM and $/yen exchange rates. Do not announce the agreed-upon central rates, and allow for flexible zonal boundaries. |
| The Plaza-Louvre Intervention Accords and the Floating-Rate Dollar Standard (1985-1996) | (G-3) Allow the implicit central rates to adjust when economic fundamentals among the G-3 countries change substantially. |
| The Plaza-Louvre Intervention Accords and the Floating-Rate Dollar Standard (1985-1996) | (G-3) Central banks intervene collectively but infrequently to reverse short-run exchange rate trends that threaten a zonal boundary. Signal the collective intent by announcing rather than hiding intervention. |
| The Plaza-Louvre Intervention Accords and the Floating-Rate Dollar Standard (1985-1996) | (G-3) Germany, Japan and the U.S. Hold reserves in each other's currencies; for the United States, this means building up reserves in deutsche marks, yen, and possibly other convertible currencies. |
| The Plaza-Louvre Intervention Accords and the Floating-Rate Dollar Standard (1985-1996) | (G-3) Sterilize the immediate impact of exchange market interventions by not adjusting short-term interest rates. |
| The Plaza-Louvre Intervention Accords and the Floating-Rate Dollar Standard (1985-1996) | (G-3) Each G-3 country aims its monetary policy toward stable prices (measured by domestic consumer or wholesale prices or the GNP deflator), which indirectly anchors the world price level and reduces the drift in exchange rate zones. |
| The Plaza-Louvre Intervention Accords and the Floating-Rate Dollar Standard (1985-1996) | Support or do not oppose interventions by the G-3 to keep the dollar within its target zone limits. |
| The Spirit of the European Monetary System (1979) & The European Monetary System as a "Greater DM" Area (1979-1992) | Fix a par value for each exchange rate in terms of the European Currency Unit, a basket weighted according to country size. |
| The Spirit of the European Monetary System (1979) & The European Monetary System as a "Greater DM" Area (1979-1992) | Keep exchange rates stable in the short-run by limiting movements in bilateral rates to 2.25 percent on either side of the central rate. |
| The Spirit of the European Monetary System (1979) & The European Monetary System as a "Greater DM" Area (1979-1992) | When an exchange rate threathens to breech a bilateral limit, the strong currency central bank must lend freely to the weak-currency central bank to support the exchange rate. |
| The Spirit of the European Monetary System (1979) & The European Monetary System as a "Greater DM" Area (1979-1992) | Adjust the par value in the intermediate term only if necessary to realign national price levels, and only with the collective agreement of other EMS countries. |
| The Spirit of the European Monetary System (1979) & The European Monetary System as a "Greater DM" Area (1979-1992) | Work toward a convergence of national macroeconomic policies that would lead to stable long-run par values for exchange rates. |
| The Spirit of the European Monetary System (1979) | Maintain free currency convertibility for current account transactions. |
| The Spirit of the European Monetary System (1979) | Hold foreign exchange reserves primarily in ECUs with the European Fund for Monetary Cooperation (EFMC), and reduce U.S. Dollar reserves. |
| The Spirit of the European Monetary System (1979) | Repay central bank debts quickly from exchange reserves or by borrowing from the EFMC within strict long-term credit limits. |
| The Spirit of the European Monetary System (1979) | No single country's money serves as a reserve currency nor does its national monetary policy serve (asymetrically) as the nominal price anchor for the group. |
| The European Monetary System as a "Greater DM" Area (1979-1992) | Avoid using the credit facilities of the EFMC. |
| The European Monetary System as a "Greater DM" Area (1979-1992) | (Members except Germany) Intervene inside the formal bilateral parity bands to stabilize currency values vis-à-vis the deutsche mark (DM). Intervene in DM rather than in U.S. Dollars. |
| The European Monetary System as a "Greater DM" Area (1979-1992) | (Members except Germany) Keep exchange reserves in DM instruments as well as in U.S. Treasury bonds. |
| The European Monetary System as a "Greater DM" Area (1979-1992) | (Members except Germany) Adjust national monetary growth and short-term interest rates to support exchange market interventions. |
| The European Monetary System as a "Greater DM" Area (1979-1992) | (Members except Germany) Subordinate national monetary policy so that long-term price inflation converges to or remains the same as that in Germany. |
| The European Monetary System as a "Greater DM" Area (1979-1992) | (Members except Germany) Continue to liberalize capital controls. |
| The European Monetary System as a "Greater DM" Area (1979-1992) | (Germany) Remain passive in the foreign exchange market with respect to other EMS countries. |
| The European Monetary System as a "Greater DM" Area (1979-1992) | (Germany) Keep capital markets open for borrowing and investing by foreign residents and sovereigns. |
| The European Monetary System as a "Greater DM" Area (1979-1992) | (Germany) Sterilize the effects of official intervention on the german monetary policy. |
| The European Monetary System as a "Greater DM" Area (1979-1992) | (Germany) Set monetary policy independently to serve as an anchor for the EMS price level. |