mr greenspan discusses recent trends in the management of foreign exchange reserves speech by the chairman of the board of governors of the federal reserve system, alan greenspan, at the world bank ’ s conference on recent trends in reserves management, washington, d. c., on 29 april 1999. one way to address the issue of the management of foreign exchange reserves is to start with an economic system in which no reserves are required. there are two. the first is the obvious case of a single world currency. the second is a more useful starting point : a fully functioning fully adhered to, floating rate world. all requirements for foreign exchange in this idealised, i should say, hypothetical ; system could be met in real time in the marketplace at whatever exchange rate prevails. no foreign exchange reserves would be needed. if markets are functioning effectively, exchange rates are merely another prices to which decision makers - - both public and private - - need respond. risk - adjusted competitive rates of return on capital in all currencies would converge, and an optimised distribution of goods and services enhancing all nations standard of living would evolve. public and private market participants would require only liquid reserves denominated in domestic currency. and in the case of a central bank of a fiat currency regime, such reserves can be created without limit. but, clearly, the real world is not perceived to work that way. even if it did, it is apparent from our post world war i history, that national governments are disinclined to grant currency markets unlimited rein. the distributions of income that arise in unregulated markets have been presumed unacceptable by most modern societies, and they have endeavoured, through fiscal policies and regulation, to alter the outcomes. in such environments it has been the rare government that has chosen to leave its international trade and finance to what it deems the whims of the marketplace. such attitudes very often are associated with a mercantilist view of trade that perceives trade surplus as somehow good, deficits bad. since in the short run, if not in the long run, trade balances are affected by exchange rates, rates that are allowed to float freely are few and far between. in a crisis, of course, monetary authorities are often overwhelmed, and lose any control of the foreign exchange value of their domestic currency. most nations, for good or ill, have not been indifferent to the foreign exchange value of their currency. i say most, but not all

by unmarried parents, compared with 47 percent for the lower half of households with children. distributional statistics for families with children are based on a sorting of only families with children. congressional budget office historic budget data. income security programs include ui, ssi, snap eitc, and other family support and nutrition programs. see jeffrey p. thompson and timothy m. smeeding ( 2013 ), “ inequality and poverty in the united states : the aftermath of the great recession ( pdf ), ” finance and economics discussion series 2013 – 51 ( washington : board of governors of the federal reserve system, july ). see james j. heckman, seong hyeok moon, rodrigo pinto, peter a. savelyev, and adam yavitz ( 2010 ), “ the rate of return to the highscope perry preschool program, ” journal of public economics, vol. 94 ( 1 - 2 ), pp. 114 – 28 ; and clive r. belfield, milagros nores, steve barnett, and lawrence schweinhart ( 2006 ), “ the high / scope perry preschool program : cost - benefit analysis using data from the age - 40 followup, ” journal of human resources, vol. 41 ( winter ), pp. 162 – 90. bis central bankers ’ speeches states, since local funding is often important. 25 in 2010, the united states ranked 28th out of 38 advanced countries in the share of four - year - olds enrolled in public or private early childhood education. 26 similarly, the quality and the funding levels of public education at the primary and secondary levels vary widely, and this unevenness limits public education ’ s equalizing effect. the united states is one of the few advanced economies in which public education spending is often lower for students in lower - income households than for students in higher - income households. 27 some countries strive for more or less equal funding, and others actually require higher funding in schools serving students from lower - income families, expressly for the purpose of reducing inequality in resources for children. a major reason the united states is different is that we are one of the few advanced nations that funds primary and secondary public education mainly through subnational taxation. half of u. s. public school funding comes from local property taxes, a much higher share than in other advanced countries, and thus the inequalities in housing wealth and income i have described enhance the ability of more - affluent school districts to spend more on public schools.