SEMINAIRE DE RECHERCHE EN ECONOMIE - GATE Lyon Saint-Etienne : PIERRE-HERNAN ROJAS

Pierre-Hernan Rojas, EconomiX, CNRS (UMR 7235) – Université Paris-Nanterre, présentera un séminaire intitulé : Triffin Dilemma and Regional Monetary Approach : an Appraisal.

Thème de recherche / Main topics : Bretton Woods, clearing mechanism, European Payments Union, International Monetary Fund, international money, Triffin.

Résumé / abstract  : This paper discusses the origins of the Triffin dilemma and shows that Triffin’s critics of the Bretton Woods system were prior to the dollar glut of the late 1950s, leading him to formulate concrete propositions for European monetary integration in the late 1940s and in the 1950s to get out what will become the dilemma. In 1946, Triffin became Director of Exchange Control at the International Monetary Fund at a time when the young Bretton Woods institution failed in providing a multilateral system of payments based on full currencies convertibility. According to Triffin, because countries were not prepared to trade on dollar-convertibility, bilateralism and trade and exchange restrictions were unavoidable in the immediate postwar years. As a remedy, Triffin made reform proposals to cope with the structural IMF’s inability to eliminate exchange restrictions on current transactions and to outlaw bilateral payments arrangements. In a series of IMF memoranda, Triffin advocated for a European clearing union aiming at fostering and liberalizing European trade while economizing international reserves. First at the IMF and then at the Economic Cooperation Administration, Triffin succeeded in promoting his ideas, giving rise to the European Payments Union in 1950. The success of this institution during the 1950s strengthened Triffin’s belief to call into question the architecture and functioning of the Bretton Woods system, stressing that an international monetary system centralized around the US currency and policy did not foster its flexibility and stability. Actually, the formulation of the Triffin dilemma in 1960 was the consequence and not the cause of Triffin’s involvement into broader regional monetary integration.

Pierre-Hernan Rojas

Triffin Dilemma and Regional Monetary Approach : an Appraisal