To avoid global imbalances that could lead to the collapse of the dollar, Williamson (Peterson Institute, Washington, DC) proposes some variant of a reference rate system, under which countries could not push the exchange rate too far out of alignment with a reference rate. Such a system would benefit the global economy by stabilizing private sector expectations of future exchange rates and assisting International Monetary Fund monitoring. The analysis concludes with a hypothetical history of how an effective reference rate system might have impacted recent macroeconomic issues. Annotation 2007 Book News, Inc., Portland, OR (booknews.com)
