Is It 1958 or 1968? Three Notes on the Longevity of the Revived

IT IS NOW widely accepted that the broad outlines of the current interna-tional monetary system are as we described them almost two years ago and labeled “the Revived Bretton Woods system. ” This system’s main features are —the emergence of a macroeconomically important group of economies that manage their currencies vis-à-vis the dollar to support export-driven growth —the United States as center and reserve currency country, providing financial intermediation services for foreign, and particularly Asian, sav-ing through its national balance sheet, and willing to accept large current account imbalances —a group of poorer economies implementing export-led development policies and exporting large amounts of capital to richer economies, mostly the United States —unusually low and even falling short- and long-term real interest rates as a result of this glut of mobile global savings, and —a group of industrial and emerging economies with floating exchange rates, whose currencies are under incessant pressure to appreciate. Not agreed and under vigorous discussion is how long this system can last. Will it be a meteoric flash with a spectacular end soon to come? O