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The United States and the European Economic Community: A Problem of Adjustment

Published online by Cambridge University Press:  22 May 2009

Henry C. Wallich
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Extract

The movement toward a one-world economy that seemed well underway during the middle 1950's has suffered setbacks. Retrogression has been particularly noticeable where previously progress had been most promising—in the relations of the United States with other industrial countries and especially with the European Economic Community (EEC). Difficulties over the United States' payments deficit, the international role of the dollar, and direct investment by the United States, mark the trend. The outcome of the Kennedy Round negotiations, fortunately, was a success, but the very duration and the bitterness of the negotiations were symptomatic of a deteriorating relationship. And complicating these economic problems were the political difficulties arising over the North Atlantic Treaty Organization (NATO) and Vietnam.

Type
Articles
Information
International Organization , Volume 22 , Issue 4 , Autumn 1968 , pp. 841 - 854
Copyright
Copyright © The IO Foundation 1968

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References

1 The term “one-world economy”, as used by the author, implies a system which while respecting the sovereignty of nations, would in its functioning resemble a single economy with free movement of goods, money, and ultimately people and with monetary and fiscal policies coordinated by the discipline of international markets.

2 Simulation experiments by Richard Cooper have shown that countries suffering from reciprocal payments surpluses and deficits can achieve balance-of-payments equilibrium substantially faster if they coordinate their policies. See Richard Cooper in Quarterly Journal of Economics, forthcoming.

3 See Mundell, Robert A., “The Crisis Problem,” Monetary Problems of the International Economy, ed. by Mundell, R. A. (University of Chicago Press), forthcomingGoogle Scholar.