Plaza Accord
45
MENTIONS
32
EPISODES
28
PODCASTS
Search complete. 45 mentions across 32 episodes found for "Plaza Accord".
Sep 26, 2026
Mark ThorntonHOST
So it doesn't look good.
Mark ThorntonHOST
for the US dollar and we've had periods where the purchasing power of the dollar has declined by 50% after World War one 50% after World War two We saw a decrease in the purchasing power of the US dollar by over 50% in the 1970s during the stagflation of the 1970s and we also saw a 50 percent decline in the foreign exchange value of the U.S. dollar in the mid 1980s during the Reagan administration and the Plaza Accords.
Mark ThorntonHOST
And, you know, a 50 percent depreciation of the dollar or 50 percent.
Mark ThorntonHOST
devaluation of the dollar versus other currencies, those were all very significant negatives on the economics, the family economics in the United States.
Gita GopinathGUEST
That's what happened during, you know, Reagan's time, 1980s.
Gita GopinathGUEST
That's what led to the Plaza Accord and then all the adjustments that followed after that.
Gita GopinathGUEST
Then you also do worry about, uh, the possibility of crises.
Gita GopinathGUEST
The great financial crisis was preceded by growing imbalances, and there was a sense in which all this big savings glut, all this money flushing around, all these large surpluses and deficits were part of the problem.
Peter AlexanderGUEST
As long as you compete.
Peter AlexanderGUEST
And I've made the argument before where we made the mistake in retrospect with the ball, with the Plaza Accord, not because of the currency or anything else was the Japanese came in and said, okay, you're going to build factories and, In Georgia, North Carolina, wherever.
Peter AlexanderGUEST
And you don't have to worry about paying union wages.
Peter AlexanderGUEST
That was like the tradeoff.
Richard WernerGUEST
So from the late 80s, well, from 86, 87 onwards, the Bank of Japan forced the banks to increase property lending dramatically, creating this asset bubble, which is part of, you know, U.S. pressure in the background.
Richard WernerGUEST
The Fed, the Plaza Agreement, America wanted this to happen.
Richard WernerGUEST
Japan is U.S. occupied.
Richard WernerGUEST
More or less, they have to do what they're told.
K.J. NohGUEST
Japan has had decades of economic stagnation.
K.J. NohGUEST
Why? Because it was decided to take down its economy in the Plaza Accords.
K.J. NohGUEST
Has that changed anything for them? I don't think so.
K.J. NohGUEST
Will it change anything for them now? You have to understand that Japan is not a democracy that people don't really have power over its government.
Warwick PowellGUEST
They talk about things like overcapacity.
Warwick PowellGUEST
But again, let's face it, Japan for many years ran global export surpluses and not once did we get serious complaints from anybody except the Americans themselves, ultimately leading to coercion against Japan and forcing Japan to sign off on the Plaza Accord.
Warwick PowellGUEST
It's a classic case of it's good for one but not good for the other.
Warwick PowellGUEST
And frankly, Chinese capacity is the only thing at the moment that is enabling the world to keep a lid on inflation caused principally by American wars and also is empowering the global south to finally break the shackles of American colonialism and Western colonialism and embark on their own developmental pathway.
Ian FletcherGUEST
But you can do that if you bring down the value of the US dollar, which was done before.
Ian FletcherGUEST
It was done in the mid-1980s by the Plaza Accord in the Reagan administration when they were facing a lot of upset about the trade situation in Congress at the time.
Wolf TivyHOST
Mm-hmm.
Ian FletcherGUEST
So what it would take to do that is you would need some kind of moderate variable tax on incoming flows of capital into the United States.
Shahin ValléeGUEST
And so I think if you create pressure through the exchange rate, you have a higher chance of seeing the policy prescriptions of the IMF taking place.
Shahin ValléeGUEST
And I think we have, even though it's a long time ago now, we have one example of exchange rate policy coordination actually working, and that's the Plaza Accord of 85.
Shahin ValléeGUEST
Now, is the moment ripe for something like that? Maybe not.
Shahin ValléeGUEST
Is that what we should have on the horizon as an objective? I think so.
Gary GenslerHOST
The exuberance of the late 1980s, I think in part was this remarkable manufacturing-led, export-led, economy, but also something happened on the policy front in 1985.
Gary GenslerHOST
The United States got other countries together at a hotel in New York, the Plaza Hotel, and they came to an agreement, which subsequently is called the Plaza Accord, to actually adjust the value of currencies.
Gary GenslerHOST
And that Plaza Accord was trying to appreciate other currencies and depreciate the value of the dollar.
Gary GenslerHOST
That really started to change the whole dynamic as to this export-driven economy in Japan.
Gary GenslerHOST
The banking sector and the central banks of Japan, I think, made some policy errors in the late 1980s as well.
Simon JohnsonHOST
Yes, but I believe they built a lot.
Simon JohnsonHOST
So when you build and you have overcapacity, of course, one problem is when the bubble is over, you're saddled with all this excess capacity.
Simon JohnsonHOST
I know it's fashionable to blame the Plaza Accord, Gary, which pressed for the yen to appreciate.
Demetri KofinasHOST
But in fact, by decentralizing the international financial system, the dollar actually became stronger.
Demetri KofinasHOST
And to your point about the petrodollar, what we saw was capital recycling back into the United States, driving the value of the dollar up so high, in fact, the international governments needed to come together under the Plaza Accords in 1985 to drive the dollar value down.
Demetri KofinasHOST
And so I think that's an important observation because it has ramifications for a lot of the work that you guys are doing in terms of what the implications would be for dollar backed stable coins.
Demetri KofinasHOST
Isn't that right?
22 more episodes mention Plaza Accord.
Create an account to see the whole feed, search across every transcript, and follow the entities you care about.