Bretton Woods III?

Trade imbalances are beginning to narrow and the current crisis has a role in it

Last Updated: May 18, 2009, 07:02 IST1 min

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A few years back, before this crisis erupted, several economists were concerned about the sustainability of the large global imbalances fueled by the so-called Bretton Woods II system. These economists recognized, in the tendency of export-led economies to manage their exchange-rate systems, the origin of large trade and current account surpluses that, via large foreign reserve accumulation, were financing the mirror image of those surpluses, namely the large U.S. trade and current account deficits.

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First Published: May 18, 2009, 07:02

Bretton Woods II system U.S. trade and current account deficits

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(This story appears in the Jun 19, 2009 issue of Forbes India. To visit our Archives, Click here.)