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Keynesian ReflectionsEffective Demand, Money, Finance, and Policies in the Crisis$
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Toshiaki Hirai, Maria Cristina Marcuzzo, and Perry Mehrling

Print publication date: 2013

Print ISBN-13: 9780198092117

Published to Oxford Scholarship Online: May 2013

DOI: 10.1093/acprof:oso/9780198092117.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 23 September 2021

Why Not Bancor?

Why Not Bancor?

Keynes’s Currency Plan as a Solution to Global Imbalances

(p.172) 9 Why Not Bancor?
Keynesian Reflections

Toshiaki Hirai

Maria Cristina Marcuzzo

Perry Mehrling

Oxford University Press

This chapter revisits Keynes’s post-war currency plans as a source of inspiration to address the persistent problem of global imbalances. It shows how the international monetary system established at Bretton Woods contributed decisively to broaden balance of payments disequilibria. It argues, moreover, that the International Clearing Union proposed by Keynes would have been far more appropriate to avoid the build-up of such imbalances, being characterized by radically different features from those of the Bretton Woods system, namely: an international unit of account, distinct from all national currencies; a symmetric distribution of the burden of readjustment between debtor and creditor countries; a criterion to detect chronic disequilibria and to correct exchange rates accordingly. Finally, this chapter suggests that the principles of the Keynes plan could contribute to reform financial institutions today with a view to face current imbalances, globally and within the euro area.

Keywords:   global imbalances, Clearing Union, Bretton Woods system, euro area, international monetary system, exchange rate regimes

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