DB: Assessing Bretton Woods II A Decade Later

In 2003 Deutsche Bank proposed the idea that the Bretton Woods monetary system that fell apart after Nixon moved the US off the gold standard hadn’t so much disappeared as gone dormant because the periphery countries – Europe and Japan – no longer needed financial inter-mediation from the core. But they also argued that the system had reasserted itself with China and other emerging nations making up the new periphery, a framework they called Bretton Woods II. More than a decade later economists Michael Dooley, David Folkerts-Landau and Peter Garber are revisiting that thesis to see how it has held up, and with a few exceptions they find that it has played out as expected.

Foreign reserves, current account...

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