Working Paper: NBER ID: w4642
Authors: Michael D. Bordo; Dominique Simard; Eugene White
Abstract: We reinterpret the commonly held view in the U.S. that France, by following a policy from 1965 to 1968 of deliberately converting their dollar holdings into gold helped perpetuate the collapse of the Bretton Woods International Monetary System. We argue that French international monetary policy under Charles de Gaulle was consistent with strategies developed in the interwar period and the French Plan of 1943. France used proposals to return to an orthodox gold standard as well as conversions of its dollar reserves into gold as tactical threats to induce the United States to initiate the reform of the international monetary system towards a more symmetrical and cooperative gold-exchange standard regime.
Keywords: Bretton Woods; International Monetary System; Gold Standard; French Monetary Policy
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| France's conversion of dollar holdings into gold (F33) | weakened confidence in the dollar (F31) |
| weakened confidence in the dollar (F31) | collapse of the Bretton Woods system (F33) |
| France's conversion of dollar holdings into gold (F33) | collapse of the Bretton Woods system (F33) |
| French government's references to an orthodox gold standard (F33) | prompt U.S. actions (E65) |