Strained Relations: US Foreign-Exchange Operations and Monetary Policy in the Twentieth Century [Hardcover]

During the twentieth century, foreign-exchange intervention was sometimes used in an attempt to solve the fundamental trilemma of international finance, which holds that countries cannot simultaneously pursue independent monetary policies, stabilize their exchange rates, and benefit from free cross-border financial flows. Drawing on a trove of previously confidential data,Strained Relationsreveals the evolution of US policy regarding currency market intervention, and its interaction with monetary policy. The authors consider how foreign-exchange intervention was affected by changing economic and institutional circumstancesmost notably the abandonment of the international gold standardand how political and bureaucratic factors affected this aspect of public policy.

Michael D. Bordois professor of economics at Rutgers, the State University of New Jersey, and a research associate of the NBER.Owen F. Humpageis a senior economic advisor in the Research Department of the Federal Reserve Bank of Cleveland.Anna J. Schwartz(19152012) was a research associate of the NBER.

Preface
1.   On the Evolution of US Foreign-Exchange-Market Intervention: Thesis, Theory, and Institutions
2.   Exchange Market Policy in the United States: Precedents  and Antecedents
3.   Introducing the Exchange Stabilization Fund, 1934–1961
4.   US Intervention during the Bretton Woods Era, 1962–1973
5.   US Intervention and the Early Dollar Float, 1973–1981
6.   US Foreign-Exchange-Market Intervention during the Volcker-Greenspan Era, 1981–1997
7.   Lessons from the Evolution of US Monetary and Intervention Policies
Epilogue: Foreign-Exchange-Market Operations in the Twenty-First Century
Appendix 1: Summaries of Bank of England Documents
Appendix 2: Empirical Method for Assessing Success Counts
Notes
References
Index