The Plaza Accord was a joint–agreement signed on September 22, 1985, at the Plaza Hotel in New York City, between France, West Germany, Japan, the United Kingdom, and the United States, to depreciate the U.S. dollar in relation to the French franc, the German Deutsche Mark, the Japanese yen and the British pound sterling by intervening in currency markets. The U.S. dollar depreciated significantly from the time of the agreement until it was replaced by the Louvre Accord in 1987. Some commentators believe the Plaza Accord contributed to the Japanese asset price bubble of the late 1980s.

Background
The tight monetary policy of Federal Reserve's Chairman Paul Volcker and the expansionary fiscal policy of President Ronald Reagan's first term in 1981-84 pushed up long-term interest rates and attracted capital inflow, appreciating the dollar. The French government was strongly in favor of currency intervention to reduce it, but US administration officials such as Treasury Secretary Donald Regan and Under Secretary for Monetary Affairs Beryl Sprinkel opposed such plans, considering the strong dollar a vote of confidence in the US economy and supporting the concept of free market above all else. At the 1982 G7 Versailles Summit the US agreed to a request by the other members to a study of the effectiveness of foreign currency intervention, which resulted in the Jurgensen Report at the 1983 G7 Williamsburg Summit, but it was not as supportive of intervention as the other leaders had hoped. As the dollar's appreciation kept rising and the trade deficit grew even more, the second Reagan administration viewed currency intervention in a different light. In January 1985 James Baker became the new Treasury Secretary and Baker's aide Richard Darman became Deputy Secretary of the Treasury. David Mulford joined as the new Assistant Secretary for International Affairs.

From 1980 to 1985, the dollar had appreciated by about 50% against the Japanese yen, Deutsche Mark, French franc, and British pound, the currencies of the next four biggest economies at the time.
In March 1985, just before the G7, the dollar reached its highest valuation ever against the British pound, a valuation which would remain untopped for over 30 years. This caused considerable difficulties for American industry but at first their lobbying was largely ignored by the government. The financial sector was able to profit from the rising dollar, and a depreciation would have run counter to the Reagan administration's plans for bringing down inflation. A broad alliance of manufacturers, service providers, and farmers responded by running an increasingly high-profile campaign asking for protection against foreign competition. Major players included grain exporters, the U.S. automotive industry, heavy American manufacturers like Caterpillar Inc., as well as high-tech companies including IBM and Motorola. By 1985, their campaign had acquired sufficient traction for Congress to begin considering passing protectionist laws. The negative prospect of trade restrictions spurred the White House to begin the negotiations that led to the Plaza Accord.

The devaluation was justified to reduce the U.S. current account deficit, which had reached 3.5% of the GDP, and to help the U.S. economy to emerge from a serious recession that began in the early 1980s. The U.S. Federal Reserve System under Paul Volcker had halted the stagflation crisis of the 1970s by raising interest rates. The increased interest rate sufficiently controlled domestic monetary policy and staved off inflation. By the mid-1970s, Nixon successfully convinced several OPEC countries to trade oil only in USD, and the US would in return, give them regional military support. This sudden infusion of international demand for dollars gave the USD the infusion it needed in the 1970s. However, a strong dollar is a double edged sword, inducing the Triffin dilemma, which on the one hand, gave more spending power to domestic consumers, companies, and to the US government, and on the other hand, hampered US exports until the value of the dollar re-equilibrated. The U.S. automobile industry was unable to recover.

Meeting at the Plaza Hotel
At the 17 January 1985 G5 meeting attended by James Baker, a small amount of currency intervention to depreciate the dollar was agreed upon and subsequently took place. US intervention was small in those months, but the German authorities intervened heavily to sell dollars in foreign exchange markets in February and March. In April at an OECD meeting the US announced their potential interest in a meeting between the major industrial countries on the subject of international monetary reform, and preparations for the Plaza meeting began, with preparatory meetings by G5 deputies in July and August. On 22 September 1985, the finance ministers and central bank governors of the United States, France, Germany, Japan and Great Britain met at the Plaza Hotel in New York City and came to an agreement on the announcement that "some further orderly appreciation of the non-dollar currencies is desirable" and they "stand ready to cooperate more closely to encourage this when to do so would be helpful". The following Monday when the meeting was made public, the dollar fell 4 percent in comparison to the other currencies.

Effects

Trade deficit 
While for the first two years the US deficit only worsened, it then began to turn around as the elasticities had risen enough that the quantity effects began to outweigh the valuation effect. The devaluation made U.S. exports cheaper to purchase for its trading partners, which in turn allegedly meant that other countries would buy more American-made goods and services. The Plaza Accord failed to help reduce the U.S.–Japan trade deficit, but it did reduce the U.S. deficit with other countries by making U.S. exports more competitive. And thus, the US Congress refrained from enacting protectionist trade barriers.

Objective failure 
Joseph E. Gagnon describes the Plaza's result being more due to the message that was sent to the financial markets about policy intentions and the implied threat of further dollar sales than actual policies. Intervention was far more pronounced in the opposite direction following  the 1987 Louvre Accord when the dollar's depreciation was decided to be halted.

The Plaza Accord was successful in reducing the U.S. trade deficit with Western European nations, but largely failed to fulfill its primary objective of alleviating the trade deficit with Japan. This deficit was due to structural conditions that were insensitive to monetary policy, specifically trade conditions. The manufactured goods of the United States became more competitive in the exports market, though were still largely unable to succeed in the Japanese domestic market due to Japan's structural restrictions on imports. The Louvre Accord was signed in 1987 to halt the continuing decline of the U.S. dollar.

Following the subsequent 1987 Louvre Accord, there were few other interventions in the dollar's exchange rate such as by the first Clinton Administration in 1992-95. However, since then currency interventions have been few among the G7. The European Central Bank supported in 2000 then over-depreciated euro. The Bank of Japan intervened for the last time in 2011, with the cooperation of the US and others to dampen strong appreciation of the yen after the 2011 Tōhoku earthquake and tsunami. In 2013 the G7 members agreed to refrain from foreign exchange intervention. Since then the US administration has demanded stronger international policies against currency manipulation (to be differentiated from monetary stimulus).

The signing of the Plaza Accord was significant in that it reflected Japan's emergence as a real player in managing the international monetary system. However, the rising yen may also have contributed to recessionary pressures for Japan's economy, to which the Japanese government reacted with massive expansionary monetary and fiscal policies. That stimulus in combination with other policies led to the Japanese asset price bubble of the late 1980s. Because of this some commentators blame the Plaza Accord for the bubble, which when burst led into a protracted period of deflation and low growth in Japan known as the Lost Decade, which has effects still heavily felt in modern Japan. Jeffrey Frankel disagrees on the timing, pointing out that between the 1985-86 years of appreciation of the yen and the 1990s recession, came the bubble years of 1987-89 when the exchange rate no longer pushed the yen up. The rising Deutsche Mark also didn't lead to an economic bubble or a recession in Germany. Economist Richard Werner says that external pressures such as the accord and the policy of Ministry of Finance to reduce the official discount rate are insufficient in explaining the actions taken by the Bank of Japan that led to the bubble.

See also
 Currency war
 International monetary conferences
 Tripartite Agreement of 1936
 Dodge Line, yen to dollar equalization efforts March 7, 1949
 Endaka

References

External links
Announcement the Ministers of Finance and Central Bank Governors of France, Germany, Japan, the United Kingdom, and the United States (Plaza Accord)

Reverse Plaza Accord

1985 in economics
1985 in Japan
Economic history of Japan
Economic history of the United States
Economy of West Germany
Foreign exchange market
G7 summits
International macroeconomics
Treaties concluded in 1985
Treaties of France
Treaties of Japan
Treaties of the United Kingdom
Treaties of the United States
Treaties of West Germany
United States–Asian relations
United States–European relations
플라자 합의( - 合意, , )란 1985년 9월 22일 미국 뉴욕에 있는 플라자 호텔에서 G5 경제선진국(프랑스, 서독, 일본, 미국, 영국) 재무장관, 중앙은행총재들의 모임에서 발표된 환율에 관한 합의를 가리킨다.

배경 
1980년대 초 미국 로널드 레이건 행정부는 전임 지미 카터 행정부에서부터 이어진 높은 인플레이션의 억제를 목적으로 엄격한 금융 긴축 정책을 시행했다. 금리는 두 자리에 달해 세계의 유동자금은 미국으로 집중돼서 미 달러의 가치가 올라갔으며 동시에 미국의 수출 감소와 수입 확대(무역 불균형)가 이루어졌다. 고금리 정책을 통해 민간 투자를 억제해서 인플레이션 탈출은 성공했다. 그러나 결과적으로 막대했던 무역 흑자가 줄어들게 되었다. 그 후에 인플레이션이 진정됨에 따라 금융 완화 논의가 진행되었다. 이는 경기 회복, 즉 무역 적자 심화를 막기 위해서였다. 하지만 금리 하락이 진행되면 미국의 금융시장은 투자매력을 잃고 그와 함께 달러시장은 점차 불안정화의 길로 들어서게 될 것으로 보였다. 요컨대 1970년대 말기 달러 위기의 재발을 두려워한 선진국이 협조적 달러 안정화 내지 하락의 실시를 꾀했던 까닭에 금리인하를 통한 달러 평가절하 메커니즘이 아닌 정치적 결정에 의한 이 합의가 이루어졌다.

진행과정 
앞서 미국 긴축정책으로 말미암아 1980년부터 1985년 사이 미국 달러는 당시 가장 큰 경제규모를 갖춘 4개 국가 통화인 일본 엔, 독일 마르크, 프랑스 프랑 그리고 영국 파운드에 대해 약 50% 평가절상한 상태였다. 폴 볼커 하 연방 준비 제도는 금리를 인상해 1970년대 스태그플레이션 위기를 막았지만, 금리인상은 미국 달러의 가치를 높여서 세계 시장에서 미국산업계(특히 자동차업계)의 경쟁력을 약화시켰다. 당시 미국은 대외 무역수지 불균형과 안으로는 재정적자에 시달리고 있었다. 일본 자동차로 말미암아 일자리를 잃은 미국 노동자들이 일본 차량을 부수며 시위를 하기도 하였다. 이것이 레이건 정부의 유명한 ‘쌍둥이 적자’이다.

미국 정부 처지에서 달러 평가절하 당위성은 두 가지였다. 국내총생산의 3.5%에 달하는 미국 경상수지 적자를 감소시키는 것과 1980년대 초반 시작된 미국 경제의 급작스러운 경기침체에서 벗어나는 데 있다. 그렇지만 결과적으로 미국 정부는 금리 인하를 거부했다. 금융산업계는 몰리는 달러로 수익을 낼 수 있었고, 금리인하를 통한 달러 평가절하는 인플레이션을 줄이고자 하는 로널드 레이건 정부의 계획에 반했기 때문이다.

그러나 미국 산업계는 이에 굴하지 않고 외국과 경쟁에 대항해서 자국 산업 보호를 요청하는 캠페인을 시작하였고, 제조업자, 서비스 제공업자 농부들이 가담했다. 첨단 기술 기업인 IBM과 모토로라는 물론 곡물 수출업체, 자동차 제조업체, 캐터필라 같은 엔지니어링 업체들도 가담했다.

1985년까지 캠페인은 의회가 무역보호법 통과를 고려할 정도로 많은 지지를 얻었다. 무역 규제에 대한 가시화는 백악관이 해외 주요국들과 협상에 유리하게 작용하였고 플라자 합의에 도달하도록 이끌었다.

영향 
플라자 합의에서 미국 달러화 가치를 내리고 일본 엔화와 독일 마르크화 가치를 높이는 정책을 채택했었다. 발표일 다음날에 달러화 환율은 1달러에 235엔에서 약 20엔이 하락하였다. 1년 후에는 달러의 가치가 거의 반이나 떨어져 120엔 대에 거래가 이루어지는 상태까지 되었다.

미국 달러 가치 하락은 미국 수출품을 수입하는 나라가 저렴하게 구매할 수 있게 해서 점차적으로 많은 나라들이 미국이 생산한 제품과 서비스를 더 많이 구매할 수 있게 했다.

플라자 합의로 일본에서는 급속한 엔고로 인해 ‘엔고 불황’이 일어날 것으로 우려됐지만, 초기의 일본은행은 기준금리를 인하하지 않고 5% 그대로 동결시켰고, 무담보 콜금리는 6%미만에서 8%로 올렸다. 하지만 엔고에 의한 불황의 발생 우려가 현실화되자 저금리 정책이 시행되었다. 이 저금리 정책이 부동산이나 주식 투기를 가속화하여 거품 경제 가열을 초래하였다. 또 엔고에 의하여 일본 경제의 규모는 상대적으로 급속히 확대되었다. “반액 세일”이라고까지 일컬어지는 미국 자산 사들이기, 고부가가치 상품의 생산, 해외여행의 붐, 자금이 싼 나라로의 공장 이전 등이 계속되었다. 이러한 현상을 일본인들은 일억총중류라는 개념으로 파악하기도 하였다.

그 후에 지나쳤던 달러화 하락 현상에 브레이크를 걸기 위하여 환율의 안정화를 꾀하기 위해 1987년 다시금 각국이 협조하기로 하는 루브르 합의가 이루어졌다.

참조 

국제 무역
외환시장
1985년 경제
1985년 일본
독일의 경제사
미국의 경제사
일본의 경제사
일본의 조약
프랑스의 조약
영국의 조약
미국의 조약
서독의 조약
미국-아시아 관계
미국-유럽 관계
1985년 9월
1985년 체결된 조약
일본의 거품 경제