“Eichengreen’s purpose is to provide a brief history of the international monetary system. In this, he succeeds magnificently. Globalizing Capital will become a. Globalizing Capital: A History of the. International Monetary A major theme of Barry Eichengreen’s accessible history of the internationa etary system since. Economist Barry Eichengreen offers great insights into the workings of the system from in the second edition of Globalizing Cap.

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The Great Depression put a stake in its heart, as Hoover-style policies to maintain it by raising interest rates only worsened economic conditions. Third, the main alternative to the gold standard is exchange rate pegging, which faces the same “trying to stop a river with a stick” issue that the gold standard does.

This time, I think a big part of it was just that the subject matter is relatively narrow, and much of the mechanistic content is implicit in related issues that Eichengreen doesn’t see fit to explain. The Evolution of a Nineteenth-century Atlantic Write a customer review. Two facts contributed to this ability to defend the currency. The gold standard was abandoned in all but name, and currency could ‘float’ within a narrow band of values tied to the US dollar.

Forces undermining capital controls overwhelmed efforts of governments to manage their currencies. Refresh and try again.

Globalization with Chinese Characteristics by Barry Eichengreen – Project Syndicate

More generally, if the US turns its back on the global order, China will be well positioned eixhengreen take the lead on reforming the rules of international trade and investment. The United Kingdom was the major industrial power of the era. The proposed answer was the Bretton Woods System, an approach that Eichengreen scoffs at, still an “enigma” today. Aug 10, Barry Eichengreen. To see what your friends thought of this book, please globaliao up.


Jan 19, John rated it really liked it. Prices of currencies were influenced by the principles of supply and demand of the usage of those currencies.

What was critical for the successful maintenance of fixed exchange rates during that period was the fact that governmentswere relatively insulated from democratic politics and thus from pressure to trade off exchange rate stability for other goals, such as the reduction of unemployment.

Globalization glutted Europe with metals and increased the scale of international financial trading and ekchengreen along with the rest of trade.

Globalizing Capital: A History of the International Monetary System

In essence fixed exchange rates fail because of the movement of capital. The gold standard seems like a bit of harmless lunacy, but I’m also worried about the implications of extreme protectionism, the world splitting into multiple currency blocks, and a complete shuttering of global trade.

Amazon Drive Cloud storage from Amazon. Please select an option. There is too much speculation against the weakest currency. A lot of globaliizao, very thorough.

Eichengreen believes that during the Great Depression deflation could not be avoided, because had central banks attempted to inject liquidity into financial markets to bail out banks in distress they might have violated the statutes requiring them to hold a minimum ratio of gold to their liabilities p. Receive our Sunday newsletter. Its Fall and Rise in the Twentieth Century.


The story of the book is one of governments constantly feeling pressure to devalue their currency, thus increasing export competitiveness and potentially wage growth. It is accessible enough for any educated layman, although the writing at times is densely academic. If your email exists in our system, we’ll send you an eichnegreen with a link to reset your password.

When the public-sector share of national income is one-tenth, the burden of economic contraction that in some circumstances is required under the gold standard can be spread across a private sector accounting for 90 percent of national income.

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For instance, there was little appreciation that raising domestic interest rates would dampen business investment, leading to a rise in unemployment. Today pegging exchange rates would require very radical reforms of a sort that governments are understandably reluctant to embrace. Will aid economists, historians and interested people on the understanding of the main events that defined the world economic relations, especially on the twentieth century.

I recommend this book, but only if you’re already interested in the topic.

Kudos to Barclay’s for educating their clients. This view finds no support in the case of the Federal Reserve system. Gold would flow globalizal a country when the volume of exports exceeds the volume of imports.