Drawing Rights Research Articles

International Money Matters

Journal Article International Money Matters Get access International Economics: A General Textbook. By Sidney J. Wells. London: Allen & Unwin. 1969. 330 pp. Index. (Minerva Series of Students Handbooks, No. 24. Gen. ed.: Brian Chapman.) 48s. Paperback: 30s.International Policy for the World Economy. By J. O. N. Perkins. London: Allen & Unwin. 1969. 232 pp. Bibliog. Index. 38s. Paperback: 22s.Money. By Roy Harrod. London: Macmillan. 1969. 355 pp. 66s. Paperback: 35s.The International Monetary System: Efficiency and Practical Alternatives. By Herbert G. Grubel. London: Penguin Books. 1969. 208 pp. 7s.La Balance des Paiements. By Jean Weiller. Paris: Presses Universitaires de France. 1968. 128 pp. Bibliog. (‘Que sais-je?’ Le Point des Connaissances Actuelles, No. 1329.)The International Monetary System: Problems and Proposals. Ed. by Lawrence H. Officer and Thomas D. Willett. Englewood Cliffs, N.J.: Prentice-Hall. 1969. 238 pp. Bibliog. (Modern Economic Issues, Gen. ed.: Otto Eckstein. A Spectrum Book, S-200. $2.95. 30s. Hardback: 60s.Flexible Exchange Rates. By Egon Sohmen. 2nd rev. ed. Chicago, London: University of Chicago Press. 1969. 263 pp. Index. 79s.Money and the Balance of Payments. By Tibor Scitovsky. London: Allen & Unwin. 1969. 188 pp. Index. 30s.Monetary Problems of the International Economy. Ed. by Robert A. Mundell and Alexander K. Swoboda. Chicago, London: University of Chicago Press. 1969. 405 pp. Index. 113s.The International Market for Foreign Exchange. Ed. by Robert Z. Aliber. Foreword by Walter D. Fackler. New York, Washington: Praeger in co-operation with the Graduate School of Business of the University of Chicago: London: Pall Mall. 1970. 272 pp. (Praeger Special Studies in International Economics and Development.) 145s.The International Monetary Problem: Gold, Dollars, Special Drawing Rights, Wider Bands and Crawling Pegs. By Harry G. Johnson. University of Calgary. 1969. 12 pp.Efficiency in Domestic and International Money Supply. By Harry G. Johnson. Guildford, Surrey: International Economics, University of Surrey. 1970. 16 pp. (No. 3. A Lecture delivered at the University of Surrey on 7 February, 1968.)The International Monetary Fund 1945–1965: Twenty Years of International Monetary Cooperation. Volume I: Chronicle. By J. Keith Horsefield. Foreword by Pierre-Paul Schweitzer. Washington, D.C.: International Monetary Fund. 1969. 663 pp. Indexes. $5.The International Monetary Fund 1945–1965: Twenty Years of International Monetary Cooperation. Volume II: Analysis. By Margaret G. De Vries, J. Keith Horsefieldet al. Washington, D.C.: International Monetary Fund. 1969. 621 pp. Index. $5.The International Monetary Fund 1945–1965: Twenty Years of International Monetary Cooperation. Volume III: Documents. Ed. by J. Keith Horsefield. Washington, D.C.: International Monetary Fund. 1969. 549 pp. $5. or $12.50 for set of three.The Reform of Sterling. By Benjamin J. Cohen. Princeton, N.J.: International Finance Section, Department of Economics, Princeton University. 1969. 44 pp. (Essays in International Finance No. 77.) Susan Strange Susan Strange Search for other works by this author on: Oxford Academic Google Scholar International Affairs, Volume 46, Issue 4, October 1970, Pages 737–743, https://doi.org/10.2307/2614535 Published: 01 October 1970

Special drawing rights — A first accounting

Special drawing rights — A first accounting

Linking Money and Development

I T may be true that nobody has ever killed two birds with one stone. But there are many occasions on which two separate aims have been achieved by one policy instrument. Progressive rates of income tax redistribute income from rich to poor and, at the same time, stabilise the economy in the face of booms and slumps. Higher interest rates attract funds from abroad and reduce investment at home. Devaluation encourages exports and discourages imports. And so on. The proposal I wish to discuss here is to link the creation of new international reserves with development aid. The Hon. Maxwell Stamp proposed this as long ago as 1962. A distinguished group of experts, called together by the United Nations Conference on Trade and Development (UNCTAD), recommended a modified version of the Stamp plan in 1965 1 and another international group of experts met in September 1969 and produced a report on International Monetary Reform and Cooperation for Development. The Board of Governors of the International Monetary Fund (IMF) in Rio de Janeiro in 1967 agreed on a scheme of Special Drawing Rights (SDRs), by which either themselves or the equivalent currencies could be used to buy bonds of the World Bank (IBRD) or to replenish the funds of its soft-loan affiliate, the International Development Association (IDA). The World Bank or the IDA would use these funds for development aid. Each developed country would then have to compete for the additional orders to which the World Bank's investment gives rise and would earn additional reserves. The SDR amendment to the Articles of Agreement of the IMF was ratified on July 28, 1969, and the activation of the SDR scheme was announced at the September 1969 meetings of the IMF and the IBRD. At the 1968 annual meeting of the IMF the Italian Governor and Minister of Finance, Signor Colombo, put forward a proposal that the main industrial countries should use part of their reserves corresponding to a portion of their Special Drawing Rights allocations for the replenishment of IDA or for a subscription to World Bank bonds. The U.S. Congressional Subcommittee on International Exchange and Payments, under the chairmanship of Henry S. Reuss, recommended that at the 1969 meetings a resolution along the following

Special Drawing Rights (SDRs) or The Great Escape from Gold

"Special Drawing Rights (SDRs) or The Great Escape from Gold." Financial Analysts Journal, 26(1), pp. 67–68

International Monetary Fund: Allocation of Special Drawing Rights and Proposed Increase in Fund Quotas

International Monetary Fund: Allocation of Special Drawing Rights and Proposed Increase in Fund Quotas

The American Share in the Stream of International Payments

The United States position in the world economy has been changing fundamentally over recent years. The traditional large surplus accumulated through foreign trade disappeared in 1968. Gross capital inflows became as large as the proceeds of exports in that year. And the dollar declined in use as a reserve currency among central banks while its use expanded in private transactions outside the United States. Although the extreme shifts evident in 1968 may exaggerate the more lasting pattern of change, they do point to the need for a basic realignment of United States policies. In balance-of-payments adjustment, emphasis may have to be placed as heavily upon capital transactions as has been customary for trade transactions. The dollar may serve less as a reserve currency and more as an international-transactions currency. The Special Drawing Rights (SDR's) in the International Monetary Fund (IMF) should provide most needed future additions to official reserves. Changes in exchange rates should be expected to occur more frequently, but also in smaller size, to reflect the divergent paths of advance among rapidly expanding countries. United States foreign policies will have to be tailored to the relative shrinkage in the United States economic position within the world economy.

Stabilisation of the monetary system

The devaluation of the British Pound and the most speculation in gold and the dollar have lead to a hectic activity on the part of the monetary authorities in the industrial countries of the West. It is unlikely that anybody should have regarded the splitting up of the gold market—necessary though it was as a counter-measure—as a panacea which would prove efficacious in the long run. At the meeting in Stockholm of the Club of Ten the attempt was therefore made to parry the diminshing importance of gold within the monetary system by a speedier activation of the Special Drawing Rights—“the paper gold”. This constituted without doubt a decisive step towards rationalising and stabilising the international monetary system.

Special drawing rights—The result of Rio

To overcome the lack of international liquidity, those who attended the Rio de Janeiro monetary conference agreed to introduce special drawing rights. This measure stemmed from an initiative taken by the Group of Ten. It is considered a milestone in international monetary policy. INTERECONOMICS was able to interview Dr Otmar Emminger, member of the Board of Governors of the Deutsche Bundesbank and Chairman of the working party of the Group of Ten, about the reasons for introducing this new instrument and its probable effects.

I.M.F. Outline of a Facility Based on Special Drawing Rights (International Monetary Reform)

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THE MISCONCEIVED PROBLEM OF INTERNATIONAL LIQUIDITY

INTERNATIONAL monetary specialists have long warned countries against disturbing the international economy by devaluing their currencies or imposing controls to cope with merely temporary balanceof-payments deficits. Instead, countries should ride out deficits until they disappear, meanwhile drawing on previously accumulated reserves of gold and foreign exchange. To forestall speculation based on fears of devaluation, the reserves should be more than ample.' This idea was embodied in the International Monetary Fund, the European Payments Union, and the European Fund, all designed to supplement national reserves with international drawing rights. Nowadays, worries about a shortage of international liquidity are commonly documented with statistics showing that total gold and foreign-exchange reserves have grown less than in proportion to world trade since some earlier period. Suggestions abound for remedying this shortage by raising the price of gold, by increasing the resources of the International Monetary Fund, or by other measures.2 The present paper is concerned neither with whether the sup-