Macroeconomic Performance in the Bretton Woods Era, And After

No 130, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: During the Bretton Woods era, OECD countries grew at historically unprecedented rates. This Golden Age has many possible explanations, ranging from the return to liberal policies in international trade to a backlog of profitable growth opportunities after the neglect of the 1930s and war-time damage. Eichengreen (1996) has argued the the proximate cause of the rapid growth was high investment, and that this high investment was made possible by certain institutions that were particularly well suited to reconstruction and growth. On the domestic side, these institutions led to high investment rates and moderate wage claims. This paper interprets the interaction between unions and firms as a coordination game. The risk-dominant equilibrium is selected via a global game argument. Only small changes to the payoffs are necessary to explain a change in the selected equilibrium, and therefore, the growth slowdown.

Keywords: coordination games; global games; risk-dominance; Bretton Woods; macroeconomic performance; institutions (search for similar items in EconPapers)
JEL-codes: C70 E22 N14 (search for similar items in EconPapers)
Date: 2002-11-01
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Citations: View citations in EconPapers (9)

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Journal Article: Macroeconomic Performance in the Bretton Woods Era and After (2002)
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