ABSTRACT
The international economy is functioning effectively if it promotes optimum economic progress in the national economies which it comprises. An effective monetary system is a necessary underpining for an effectively functioning international economy. The United States is less reliant on international trade than any other country in the world except the Soviet Union and the People's Republic of China. The international monetary system must be sufficiently effective to preserve confidence in the world economy if it is to foster optimum economic progress in all countries, including the United States, and avoid crises of ever-deepening importance. Prolonged maintenance of disequilibrium exchange rates will cause international political problems. A smoothly functioning monetary system, which minimizes resort to controls and disequilibrium exchange rates, thus helps avoid the development of international political problems. Indeed, the optimum monetary system from this viewpoint would be one to which foreign policy in all countries could remain totally oblivious.
