Economists are misinterpreting ‘Triffin dilemma’, says BIS paper

Mount Washington - Bretton Woods
The Mt Washington Hotel, in Bretton Woods, where the agreement was signed

The apparent success of the ‘Triffin dilemma’ – named after economist Robert Triffin, who predicted the collapse of the Bretton Woods system – has led economists to “wrap his brand” around stories to which it should not be applied, according to a recent working paper.

The “dilemma” stemmed from gold’s fixed US dollar value, set at $35 an ounce in 1944, which other countries used as their nominal anchor. As global money supply rose, a gold shortage emerged, requiring ever higher US interest

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