Between Meltdown and Moral Hazard: The International Monetary and Financial Policies of the Clinton Administration

Abstract

We review and analyze the monetary and financial policies of the Clinton administration with a focus on the strong dollar policy, the Mexican rescue, the response to the Asian crisis, and the debate over reform of the international financial architecture. While we consider the role of ideas, interests and institutions in the formulation of policy, our emphasis here is on institutions, and specifically on how personnel and administrative arrangements allowed the Treasury department to exercise an unusually important influence in the development of these policies. This allowed a set of ideas imported by Treasury from academia and the markets to strongly influence the formulation of the international monetary and financial policies during the Clinton years.