ABSTRACT
The international monetary system is simply not effectively performing its basic task: maximizing the contribution which international economic activity can make to the advancement of national economic and political objectives. The enormous growth of world trade and financial movements concealed the shortcomings of the system, but they are crystal clear. Having achieved the initial postwar economic objectives of currency convertibility and a multilateral trading system, the world must attune its monetary system to the far more complex challenges of the current era. In the absence of multilateral surveillance of the entire exchange-rate regime, based on agreed international norms and guidelines to implement them, the adjustment process will remain unstable. As a result of all these shortcomings in international monetary arrangements, the frequency of "crises" remains high, despite the de facto reforms which have taken place. The broad national goal of avoiding policy constraints from the external sector is readily translated into specific international monetary policy goals.
