Dollars and Gold: Monetary and Trade Policy

Jonathan Colman

in The Foreign Policy of Lyndon B. Johnson

Published by Edinburgh University Press

Published in print September 2010 | ISBN: 9780748640133
Published online March 2012 | e-ISBN: 9780748652693 | DOI:
Dollars and Gold: Monetary and Trade Policy

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This chapter examines Johnson's contribution to the foreign economic policies of the United States. It outlines the international monetary regime of the 1960s and then explores the chronic US balance of payments deficit, due in large part to defence spending in Europe and Asia. It assesses the economic crisis of 1967–8, which arose initially from the devaluation of sterling and left the dollar exposed to speculative attack. The Johnson Administration exploited continued American influence and succeeded in the establishment of a two-tier gold market and the creation of a new international currency known as Special Drawing Rights (SDR). This chapter also covers the Administration's successful effort to liberalise trade among the developed countries through the Kennedy Round of tariff negotiations under the General Agreement on Tariffs and Trade (GATT).

Keywords: foreign economic policies; President Johnson; United States; defence spending; two-tier gold market; GATT; Special Drawing Rights

Chapter.  7011 words. 

Subjects: US Politics

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