Today, freely floating exchange rates suit most large countries better than the late economists Richard Cooper, Robert Mundell, and John Williamson thought
Williamson also championed another intermediate regime, the target zone, under which countries keep their exchange rates within pre-specified bands. He repeatedly updated his proposals to apply the target zone even to the dollar, euro, yen, and other major currencies.
But these arrangements were most popular among emerging markets. Many mixed and matched Williamson’s proposals – falling under the rubric of basket, band, and crawl (BBC) – as Botswana and Singapore still do today.
Richard Cooper; an active role at the 1978 Bonn Summit of G7 leaders. There, Germany, Japan, and the US agreed to act as locomotives, simultaneously pulling the rest of the world economy out of stagnation. At this time, Cooper gave the world the term “locomotive theory,” referring to coordinated fiscal expansion across countries.
Jeffrey Frankel, Professor of Capital Formation and Growth at Harvard University, previously served as a member of President Bill Clinton’s Council of Economic Advisers 21 April 2021
Economist John Williamson Set; Coiner of term Washington Consensus
One example of collective error, he said, came in the years of speculation in complex derivatives leading up to the 2008 financial crisis:
“We were over-mesmerized by assuming that the financial people knew what they were doing.”
WSJ 20 April 2021
https://www.wsj.com/articles/economist-john-williamson-set-off-an-unintended-uproar-11618924115
A new Washington consensus
https://englundmacro.blogspot.com/2021/04/a-new-washington-consensus.html
Robert Mundell
http://www.nejtillemu.com/mundell.htm
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