National Monetary Sovereignty and International Financial Order

Abstract

Over the last few years extensive negotiations have been undertaken to improve international financial arrangements. The agreement signed by the Finance Ministers of the Group of Ten in London in August and the proposals at the Rio meeting of the International Monetary Fund represent the culmination of governmental discussions continuing over most of a decade. Professor Robert Triffin's articles on “Gold and the Dollar Crisis”, which developed the ideas presented by John Maynard Keynes prior to the Bretton Woods Conference of 1944, concluded that a new international reserve asset was badly needed. In 1958 the United States began to incur large balance-of-payments deficits which soon seem persistent. The apparent dilemma was that the world's need for international reserves could be satisfied as long as the United States incurred deficits, while U.S. deficits weakened the U.S. reserve position.