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Inflation under the Bretton Woods system: The spillover effects of U.S. expansionary policies

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  • Selahattin Dibooğlu

Abstract

This paper examines the transmission effects of U.S. expansionary policies on inflation in the G7 countries under the latter years of the Bretton Woods system. Using quarterly data and structural vector autoregressions, this paper investigates the extent of inflation variability due to U.S. aggregate supply and aggregate demand impulses in major industrial countries. Empirical results show that a sizable proportion of inflation variability in these countries can be attributed to U.S. shocks. A brief discussion follows concerning the breakdown of Bretton Woods and implications for the design and functioning of international monetary arrangements. Copyright International Atlantic Economic Society 1999

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  • Selahattin Dibooğlu, 1999. "Inflation under the Bretton Woods system: The spillover effects of U.S. expansionary policies," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 27(1), pages 74-85, March.
    • Handle: RePEc:kap:atlecj:v:27:y:1999:i:1:p:74-85
    DOI: 10.1007/BF02299179
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    3. Bayoumi, Tamim & Eichengreen, Barry, 1994. "Macroeconomic Adjustment under Bretton Woods and the Post-Bretton-Woods Float: An Impulse-Response Analysis," Economic Journal, Royal Economic Society, vol. 104(425), pages 813-827, July.
    4. Darby, Michael R. & Lothian, James R. & Gandolfi, Arthur E. & Schwartz, Anna J., 1983. "The International Transmission of Inflation," National Bureau of Economic Research Books, University of Chicago Press, number 9780226136417, December.
    5. Niehans, Jurg, 1976. "How to Fill an Empty Shell," American Economic Review, American Economic Association, vol. 66(2), pages 177-183, May.
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