Triffin, Robert
December 1978
Foreign Affairs;Winter78/79, Vol. 57 Issue 2, p269
This article discusses views of the author on the international role and fate of the U.S. dollar in 1978. The present dollar crisis and the foreign reactions to it cannot be understood without a brief reminder of at least its proximate origins such as the evolution of the international monetary system and of the role of the dollar in it over the last ten years. Officials and public opinion in the U.S. are prone to ascribe most of the blame for the crisis of the dollar, and of the international monetary system built upon it. to the quintupling of oil prices at the end of 1973. In fact, the world inflation began well before then, and the abrupt rise of oil prices was, in part at least, prompted by it, although, of course, the oil price increase accentuated it in the following years. Hence, world import and export prices, measured in dollars, rose by less than one percent a year in the 1960s, but by more than six percent a year from 1970 through 1972, and by as much as 30 percent in the last 12 months before the explosion of oil prices in the fall of 1973. This was not unconnected, to say the least, with the enormous and mounting U.S. deficits abroad which flooded the world monetary system, doubling world reserves from the end of 1969 to the end of 1972.


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