The Concept Of The Spread, Filtering And The US International Monetary Policy

The main issue addressed in this dissertation is that the making of international monetary policies of the United States can be explained from the perspective of ideas.Researches have been made on the U.S. International monetary policies on the basis of material interests. However, observations and analysis in history show that decisions were not always made on the basis of the maximization of material interests.Rather, ideas that define the interests can explain adequately why policies were made as they were.Two cases are studied in this dissertation. Both are milestone policy changes in the history of U.S. international monetary policies. The first case is about that the idea of managing and intervening the market influenced the planning of Bretton Woods system before the end of the World War II. At that time, its domestic economy and position in the world were almost the same as those after the World War I when the U.S. government helped to restore the gold standard. However, the United States chose to build a managed international monetary system instead of a free one. The second case is about that the laissez-faire idea led to the decision of closing the gold window and of turning to floating exchange system. Nixon administration suffered from serious deficit of international payment of balance. The situations in former administrations like Kennedy and Lyndon Johnson were just as serious. The administrations could have either chosen to maintain the Bretton Woods system via the dominant role of the U.S. in the world politics and economy or to abandon gold convertibility and turn to floating exchange rate. They made different decision due to different ideas. The two cases have made it clear that material interests are not sufficient to explain why policies are made as they are while ideas explain the anomaly well.The idea-policymaking causal links and mechanism are constructed in this dissertation. Three ways of spreading economic ideas to decison makers are discussed:economic ideology trend and mass media, epistemic community and government economists. Idea filtering plays an important role in the process of policy making.Decison makers’ ideas serve as an idea filter to screen ideas. Ideas that are consistent with those of decision makers’ are accepted. Ideas that are not consistent are rejected. Decision makers interact among themselves before their idea filter is formed. What the idea filter is like depends on the structure of power and relations among the decision makers. Policies representing one idea are chosen and implemented stably when decision makers agree to accept the idea. Policies representing one idea are often rejected or implemented unstably when decision makers disagree with each other and do not have a clear idea in their mind.