Discussion Paper Details
Please find the details for DP12425 in an easy to copy and paste format below:
Title: The Gold Pool (1961-1968) and the fall of the Bretton Woods system. Lessons for central bank cooperation.
Author(s): Michael D Bordo, Eric Monnet and Alain Naef
Publication Date: November 2017
Keyword(s): Bretton Woods, central bank cooperation, Gold Pool, international monetary system, reserve currencies and sterling crisis
Programme Area(s): Economic History and International Macroeconomics and Finance
Abstract: The Gold Pool (1961-1968) was one of the most ambitious cases of central bank cooperation in history. Major central banks pooled interventions - sharing profits and losses- to stabilize the dollar price of gold. Why did it collapse? From at least 1964, the fate of the Pool was in fact tied to sterling, the first line of defense for the dollar. Sterling's unsuccessful devaluation in November 1967 spurred speculation and massive losses for the Pool. Contagion occurred because US policies were inflationary and insufficiently credible as well. The demise of the Pool provides a striking example of contagion between reserve currencies.
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Bordo, M, Monnet, E and Naef, A. 2017. 'The Gold Pool (1961-1968) and the fall of the Bretton Woods system. Lessons for central bank cooperation.'. London, Centre for Economic Policy Research. https://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=12425