Summary of System Malfunction

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System Malfunction summary


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The pre–World War I gold standard and the post–World War II Bretton Woods agreement were the last exemplars of a globally coordinated monetary system. Today, countries pursue their own fragmented interests, such as by stimulating their economies with lowered interest rates, without regard to the impacts on other nations or on their own long-term interests. Economist William R. White explains how “the present international monetary (non)system” works against the good of the global economic community. getAbstract recommends this brief but worthwhile article to policy makers, who should heed White on the need for a new postcrisis monetary system.

In this summary, you will learn

  • How countries’ pursuits of their own monetary policies impinge on other nations, endangering the world economy;
  • How global imbalances could lead to another financial crisis; and
  • Why the world needs a new global monetary system.

About the Author

William R. White is chairman of the OECD’s Economic and Development Review Committee.



National monetary policies have led to potentially dangerous global imbalances that could spark future crises. These disparities will continue without an overarching monetary system to which all economies adhere. The International Monetary Fund communicates its concerns to its members about policies...

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