Magazine article Foreign Affairs

Recent Books: Economic, Social, and Environmental: International Monetary Cooperation: Lessons from the Plaza Accord after Thirty Years

Magazine article Foreign Affairs

Recent Books: Economic, Social, and Environmental: International Monetary Cooperation: Lessons from the Plaza Accord after Thirty Years

Article excerpt

Recent Books: Economic, Social, and Environmental: International Monetary Cooperation: Lessons From the Plaza Accord After Thirty Years EDITED BY C. FRED BERGSTEN AND RUSSELL A. GREEN. Peterson Institute for International Economics, 2016, 300 pp.

The administration of U.S. President Ronald Reagan was philosophically committed to free markets, in particular the foreign exchange market. It was therefore a major surprise when, in September 1985, the finance ministers of France, Japan, the United Kingdom, and West Germany met at the Plaza Hotel in New York City with the secretary of the U.S. Treasury, James Baker, and publicly announced that the U.S. dollar was overvalued and that they would take collective action to encourage its depreciation and a corresponding appreciation of the four other major countries' currencies. The Plaza Accord was followed 17 months later by the Louvre Accord, in which the same group declared that the depreciation had gone far enough and that they would consequently take steps to stabilize exchange rates. …

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