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Working Paper

Bretton Woods and the U.S. Decision to Intervene in the Foreign-Exchange Market, 1957-1962

The deterioration in the U.S. balance of payments after 1957 and an accelerating loss of gold reserves prompted U.S. monetary authorities to undertake foreign-exchange-market interventions beginning in 1961. We discuss the events leading up to these interventions, the institutional arrangements developed for that purpose, and the controversies that ensued. Although these interventions forestalled a loss of U.S. gold reserves, in the end, they only delayed more fundamental adjustments and, in that respect, were a failure.

Working Papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views expressed in this paper are those of the authors and do not represent the views of the Federal Reserve Bank of Cleveland or the Federal Reserve System.


Suggested Citation

Bordo, Michael D., Owen F. Humpage, and Anna Schwartz. 2006. “Bretton Woods and the U.S. Decision to Intervene in the Foreign-Exchange Market, 1957-1962.” Federal Reserve Bank of Cleveland, Working Paper No. 06-09. https://doi.org/10.26509/frbc-wp-200609