Changing Fortunes

How much of the United States' postwar economic decline was desirable, a shedding of excessive global ambitions, and how much was due to self-inflicted wounds? Volcker, ex-chair of the Federal Reserve Board, and Gyohten, former finance minister of Japan, address this question as they review, in alternating chapters, the decline of the Bretton Woods system of fixed exchange rates, the oil shocks of the 1970s, efforts to curb inflation and the international debt crisis of the 1980s. Based on a joint lecture series given by the authors at Princeton's Woodrow Wilson School, this colloquium provides a valuable global perspective on the fragile U.S.-Japanese alliance and the prospects for erecting a new framework for cooperation on foreign trade and exchange rates. Volcker notes with alarm America's protectionist drift, while Gyohten emphasizes that Japan must open its markets and that the U.S. can no longer play the solo role of world policeman. Author tour. (May)