C. Fred Bergsten, Robert O. Keohane, and Joseph S. Nye
Until August 1971, the United States categorically rejected any notion of devaluing the dollar and championed an international monetary system based on fixed but adjustable exchange rates. From August 1971 through February 1973, the United States aggressively sought massive devaluation of the dollar, and since early 1973, it has actively promoted the adoption of highly flexible exchange rates.
From 1962 until November 1967, the British government borrowed billions of dollars and adopted dozens of policy measures to avoid devaluing sterling. In June 1972, the British government floated sterling-to a sure depreciation -- after just two days of speculative attack on the currency.
Until late 1971, Japan adamantly refused to consider revaluation of the yen and adopted numerous policy measures to avoid it. In 1973, Japan sold at least $6 billion from its reserves to keep the yen from depreciating back toward its earlier level.
Since the early 1960s, the United States pressed Europe and Japan to lower their barriers to US agricultural exports. In June 1973, the United States totally embargoed its exports to Europe and Japan (and everywhere else) of some of those very same agricultural products.
In the early 1960s, Brazil and other producing countries pleaded with consuming countries to negotiate the International Coffee Agreement to keep coffee prices from declining. By the middle 1970s, those coffee producers let the agreement lapse because they felt sufficiently strong to force prices up on their own.
What were the objectives of these international economic policies of some of the leading countries in the world economy? Did these objectives change as dramatically, over both longer and shorter periods of time, as appears to be the
C. Fred Bergsten is a senior fellow at the Brookings Institution in Washington, D. C., and is coeditor of this volume. Robert O. Keohane is an associate professor of political science at Stanford University in Stanford, California. Joseph S. Nye is a professor of political science at Harvard University in Cambridge, Massachusetts.