Editors' Summary.

This article introduces several articles published in the September 1974 issue of the periodical "Brookings Papers on Economic Activity." The four principal articles and the report appearing in this issue were presented at the fifteenth conference of the Brookings Panel on Economic Activity held in Washington on December 5-6, 1974. One of the papers deals with the role of the dollar in the world economy, one with the fundamental nature of the labor market in the United States, and three with different aspects of the economy's cyclical performance: the viability of thrift institutions during periods of tight money, the cyclical behavior of productivity in manufacturing, and the impact of recession on different groups in the labor market. In the first article of this issue, Marina Whitman examines the past, present, and future roles of the U.S. dollar in the world monetary system. Under the Bretton Woods system that operated for a generation prior to 1971, the dollar was different from all other currencies in several respects. First, it served as the major world "vehicle" currency and was used by private parties abroad even in many international transactions that involved no American resident. Second, it was linked to gold by the U.S. obligation to buy and sell gold for monetary purposes at a fixed price. In contrast, other countries maintained the par value of their currencies by buying and selling foreign exchange, generally using dollars for those transactions (or "interventions"). Thus, the dollar was the intervention currency. Furthermore, it was the yardstick by which the International Monetary Fund defined the value of other currencies. It was also the major reserve currency; most of the growth of official international reserves came from the acquisition of dollars by central banks.