Toward Bretton Woods 2.0?: Harold James and Paola Subacchi for Opinion Has It

Harold James and Paola Subacchi consider where the international monetary order is headed, and how to manage the coming transition. The PS Say More Newsletter | [View this message in a web browser]( In this week's newsletter, we present the newest episode of our podcast, Opinion Has It. Every other week in Opinion Has It, host Elmira Bayrasli is joined by a leading expert – or two – to examine a critical and timely issue. Toward Bretton Woods 2.0? In this episode, Elmira talks with Harold James, Professor of History and International Affairs at Princeton University, and Paola Subacchi, Professor of International Economics at the University of London’s Queen Mary Global Policy Institute. Listen now on [PS]( [Acast]( [Apple]( [Google]( or [Spotify](. Opinion Has It is now on Acast. [Follow us there]( or on your favorite listening app. [Toward Bretton Woods 2.0?]( In 1971, President Richard Nixon closed the gold window, effectively ushering in a new global monetary non-system with a single pillar: the US dollar. Fifty years later, that pillar is showing signs of strain. This week on the podcast, [Harold James]( and [Paola Subacchi]( consider where the international monetary order is headed, and whether we can muster the cooperation needed to manage the transition. [Listen now]( Opinion Has It is also available on your favorite listening app. Listen now on [Acast]( [Apple]( [Google]( or [Spotify](. In this episode... Elmira Bayrasli: Harold has likened [the emergence of digital currencies] to a new Nixon Shock. It might be destabilizing at first, but in the long run, the world may be better off. Harold James: You know, I think if you think about it, there are really just a relatively few number of currency regimes in history: the currencies backed by precious metal for thousands of years, and the Bretton Woods system has elements of that precious-metal-backed currency built into it, and the equivalence of the dollar at $35 an ounce. But that was something that the United States could change; it did change it unilaterally. There’s nothing illegal about what Richard Nixon did in 1971. But what happened then was that you got a pure fiat currency, and it took time for monetary authorities, central banks to really learn how to deal with that. The 1970s and 80s were quite unstable, in part because of very different inflation experiences. In the 1980s, there’s the beginning of a convergence process that goes on for two decades. And by the 2000s, the world is moving to a low-inflation regime. And I think we will get the same kind of divergence – that we will have countries that inflate at different rates – and that’s going to generate volatility. But it may also generate really productive thinking, and it may generate a new wave of globalization. I’m actually quite optimistic about what may happen in the longer run, as the result of a change. But the short run is bound to be turbulent. EB: But Paola isn’t convinced that the dollar is about to be dethroned. Paola Subacchi: One of the reasons behind Bretton Woods and the need to set up an international monetary system that could work without creating imbalances was exactly to promote international trade and integration through trade. So, the dollar is the most... [Read the transcript]( Listen now on [PS]( [Acast]( [Apple]( [Google]( or [Spotify](. [PS. Take 50% off a new subscription with the code SUMMER21]( Previously in Opinion Has It [The US Economy’s Great Adjustment]( [The US Economy’s Great Adjustment]( with [Betsey Stevenson]( a professor of public policy and economics at the University of Michigan, a former member of the Council of Economic Advisers under President Barack Obama, and former Chief Economist of the US Department of Labor With many low-paying jobs going unfilled, it seems that the COVID-19 crisis has forced a much-needed adjustment in a labor market where workers had long suffered from a decline in bargaining power. But, as pandemic-support programs end and automation accelerates, workers face serious risks. Listen now on [PS]( [Acast]( [Apple]( [Google]( or [Spotify](. Or [read the transcript](. [Check out the Opinion Has It archive]( Previously in Say More [Summer 2021 Reading List]( [Summer 2021 Reading List]( Just in time for a bookshelf refresh, PS contributors – including [Michael Spence]( [Nancy Qian]( [Edmund S. Phelps]( [Raghuram G. Rajan]( and more – share books that have inspired, enriched, or entertained them lately, and say why you should consider adding them to your summer reading list. [Check out the Say More archive]( [Special-Edition Magazine: Back to Health]( [Facebook]( [Twitter]( [LinkedIn]( Project Syndicate publishes and provides, on a not-for-profit basis, original commentary by the world's leading thinkers to more than 500 media outlets in over 150 countries. This newsletter is a service of [Project Syndicate](. [Change your newsletter preferences](. Follow us on [Facebook]( [Twitter]( and [YouTube](. © Project Syndicate, all rights reserved. [Unsubscribe from all newsletters](.