ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

A+| A| A-

Modern Monetary Theory, Deglobalisation and the Dollar

The article explores the interconnections between the rise of modern monetary theory, deglobalisation and the international monetary system. It discusses the evolution of the international monetary system from Bretton Woods One to Bretton Woods Three, and how this transition is linked to globalisation, and deglobalisation, or the shifts in global imbalances. Finally, it makes an evaluation of the impact of these developments on the role played by the dollar in the international monetary system and its possible future trajectory.


The rise of the modern monetary theory (MMT) in advanced economies (AEs), as classified in the International Monetary Funds (IMF) World Economic Outlook, in the wake of the global financial crisis (GFC) and exacerbated by the current COVID-19 crisis, marks the shift to Bretton Woods Three, where the central bank is constrained to pick up larger amounts of sovereign debt as globalisation retreats with the growing decoupling of economies, and sovereign borrowing increases.

The post-war global monetary system was negotiated at the Bretton Woods conference in the United States (US) even as World War II was underway. The agreed Bretton Woods One (Coppola 2020) order was the system of fixed exchange rates agreed at the Bretton Woods conference under which all global currencies were pegged to the dollar, the de facto global reserve currency, which in turn was pegged to a fixed quantity of gold. All countries were expected to settle their international obligations in dollars, while the US did so in gold.

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here


To gain instant access to this article (download).

INR 59

(Readers in India)

$ 6

(Readers outside India)

Published On : 20th Jan, 2024

Support Us

Your Support will ensure EPW’s financial viability and sustainability.

The EPW produces independent and public-spirited scholarship and analyses of contemporary affairs every week. EPW is one of the few publications that keep alive the spirit of intellectual inquiry in the Indian media.

Often described as a publication with a “social conscience,” EPW has never shied away from taking strong editorial positions. Our publication is free from political pressure, or commercial interests. Our editorial independence is our pride.

We rely on your support to continue the endeavour of highlighting the challenges faced by the disadvantaged, writings from the margins, and scholarship on the most pertinent issues that concern contemporary Indian society.

Every contribution is valuable for our future.