ABSTRACT
This chapter traces the post-ar developments in the international monetary system from the Bretton Woods system to the more or less free policy system of the present. A new proposal calling for a growth-led economic revival has met with a favorable response in the international financial community and is viewed by many as a long-range solution. The fact that national policy makers do directly influence the value of a national currency and thus the level of its real interest rates means that they also indirectly affect the obligations of debtors. As long as the interest rate follows the inflation rate and the real interest rate remains the same, this type of fluctuating interest rates has no particular consequences for either debtors or creditors. The chapter argues that the influence of exogenous factors on the contractual obligations of debtors can be brought under control only by fostering a more stable international monetary system.
