The initial presentations of the book by Giovanni Tria and Angelo Federico Arcelli, entitled A New Bretton Woods for a New World: Reflections about the Future 80 Years after the Bretton Woods Conference, took place on October 21st and 22nd. The event garnered significant interest, attracting qualified participants who actively engaged in the debates, asking pertinent questions and offering insightful contributions. The topics addressed by the authors stimulated deep reflections on the most complex economic and geopolitical issues.
Themes of the Debate
During the event, various interventions explored key aspects related to the opportunity for reform of the current global economic and international monetary systems, critically analyzing the contemporary international context and outlining potential scenarios for a revision of the global financial architecture. The discussions had significant academic value and offered a wide range of insights for the future of global economic balances, highlighting the complexity of interconnected economic dynamics and the need for a long-term strategic vision.
Book Availability
The book is now available for download, allowing a broader audience to examine in depth the analyses and proposals put forward by the authors regarding a potential new configuration of the international monetary system.
Photo Gallery
Below are some photos from the event held on October 22nd in Washington, DC, during a joint meeting with the Center for International Governance Innovation (CIGI).
Abstract
A new Bretton Woods for a new World – Reflections about the Future 80 years After the Bretton Woods Conference
The Bretton Woods system established in the aftermath of the Second World War afforded the United States an “exorbitant privilege” as the owner and sole issuer of the world’s central currency, the U.S. dollar. The role of the U.S. dollar (and somehow, in recent years, that of the euro) gave, and still gives the United States and its allies powerful leverage to influence competing powers and affords the West a position of indisputable leadership beyond military and geopolitical factors. But China’s rise and its determination to compete for global leadership include efforts to increase its weight in international trade and payment transactions.
The international monetary system has therefore evolved, and we could find ourselves on the verge of a significant change, driven by the changing nature of globalization, and the de-risk priorities, and by the digital revolution with all its consequences. The shift in the available set of payment tools that it represents is putting such pressure on central banks worldwide that the idea of developing CBDCs is gaining traction, also as a defensive move aiming at maintaining the full control of monetary policy.
In this book, drawing on a previous work, the authors start by recalling the historical background that led to the Bretton Woods agreements and presenting some reflections both on the weaknesses of the system agreed, that led to its collapse in August 1971, and on the reasons which have led, de facto, to an international monetary system still centred on the US dollar. They also describe how even this de facto system, by some referred to as the Second Bretton Woods, preserves much of the characteristics and, consequently, of the weaknesses of the system established in 1944, while in a different global macroeconomic and political context.
Then, they analyse why the conditions which have enabled the dollar to be kept as a linchpin of the international monetary system over the past few decades are weakening, endangering its sustainability, beyond its contested desirability, also in the face of the challenges posed by the spread of new digital currencies and means of payment in a context of de- globalization and protectionism trends which also represent growing factors of uncertainty.
Finally, the authors propose some ideas about the desirability, if not the necessity, of a shared path for the reform of the international monetary system, to govern its future evolution and to mitigate the uncertainties, and of the international institutions, both to regain authority and legitimacy, and to ensure a sustainable new agreement.
The hope is that a debate takes place, optimally in an international forum such as the IMF, that could lead to a negotiation for a progressive realization of a new Bretton Woods-like agreement, which should either
a) mirror the current emerging market trend of a linked multipolar currency scheme (a “quasi-bancor” scenario) anchored to a supranational tool, or b) head towards a new supranational currency anchored to a basket of national currencies bound by soft rules.