Describe the differences between the pre-WW1 gold standard and
the post-WW2 Bretton Woods monetary system, explaining the relative
benefits of each approach.
6. An examination of the record of real exchange rates after the
end of the Bretton Woods fixed exchange rate system in 1973 shows
an increase in their variability, which is due to fluctuations in
nominal exchange rates. What does this record imply for purchasing
power parity?
7. Countries with strong growth rates due to higher productivity
generally have appreciating real exchange rates. Why would higher
levels of national income result in a real currency
appreciation?
8. Compare the impact...
Essay Question: Explain the Triffin Dilemma. How does the
dilemma explain the collapse of Bretton Woods? Does it explain the
fragility of the current system of dollar hegemony?
Note: In dealing with the above you may find it very helpful to
include some of the following: Keynes' barbarous relic, asymmetric
adjustment, International Clearing Union, Bancor.