Further Essays in Monetary Economics (Collected Works of Harry Johnson)

Chapter 15

The International Monetary Crisis of 1971*

I. SEPTEMBER 1971

In a fundamental sense, the international monetary crisis precipitated by President Nixon’s announcement of his ‘new economic policy’ on August 15, 1971 has been on the cards for at least as long as since 1958, when Professor Robert Triffin of Yale began to warn his academic and official colleagues of the dangerous instability of the IMF system of organizing international currency relationships. But the focal point for a potential crisis has changed over the intervening period, with the evolution of techniques for and the practice of international monetary co-operation among the leading countries. Moreover, while the focal point of the current crisis – the relative exchange ...