“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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Even for those who are familiar with macroeconomics and monetary policies, this book is a deep, slow read. The Bretton Woods era began with officially sanctioned capital controls. Simple, realistic and easy way to understand the global monetary system without be marriage with ideals or doctrines, just facts.

Since World War I, however, universal suffrage and the rise of a politically robust labor movement have constrained the ability of government authorities to elevate external over internal stability. Starting from the early days of the markets’ globalization in the late 19th century, he traces eichhengreen transformation and the trial an error of the different international monetary systems. For instance, the IMF does not seem to have made a big difference in coordinating currency stability, but the US was able to achieve it in Europe through large and sustained loans.

Similar comments in the book are that if other countries during the interwar period had supported the exchange rate of the nation in distress, globa,izao conditions would not have deteriorated so badly p.

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Given British economic dominance in the early industrial era, a network effect took hold as other nations adopted gold as a means to lubricate the movement of goods and money with the British capitalist dynamo. Capital eichsngreen of investment and speculative funds from one country to another are not like the trade in goods. What are the pros and cons of a eichsngreen global currency analogous to the Euro? Amazon Renewed Refurbished products with a warranty.


Forces undermining capital controls overwhelmed efforts of governments to manage their currencies. The proposed answer was the Bretton Woods System, an approach that Eichengreen scoffs at, still an “enigma” today.

Globalizing Capital: A History of the International Monetary System by Barry Eichengreen

The answer is no, according to the historical record. They could either let the exchange rate float, and let ‘come what may’, or they could peg their currency to one of the other big currencies. Nevertheless, the book provides an excellent overview of major developments that forged the modern global monetary system.

Second, and related to the first, the author notes that workers and labor groups had limited political power during this period and thus could not put pressure on governments to take policy actions that staved off unemployment rather than currency devaluation, even if they had understood the relationship.

Would you like to tell us about a lower price? And once investors lost faith in a country’s ability and willingness to defend their currency, capital mobility exacerbated the currency’s weakness, rather than mitigating that weakness as it had during the gold standard when government defense of convertibility was a given.

This work is extremely well referenced with a truly astounding number of sources, both in the footnotes and in the bibliography at the end.

Globalizing Capital: A History of the International Monetary System

Capital controls freed the authorities from these unwanted consequences, but because controls are never watertight, and eventually became unenforceable, they were no answer to the weakened commitment in modern societies to pegged exchange rates. Kudos to Barclay’s for educating their clients. Kindle Edition Verified Purchase. Thus, the gold standard led to artificially contracting the economy, which harmed many groups in it.

If you are a seller for this product, would you like globaljzao suggest updates through seller support? Try the Kindle edition and experience these great reading features: Brad lgobalizao it really liked it Jul gllbalizao, Return to Book Page.


Hlobalizao Eichengreen is the convener of the Bellagio Group of academics and economic officials and chair of the Academic Advisory Committee of the Peterson Institute of International Economics. 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.

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A lot of details, very thorough. None of the original solutions, eicheengreen interest rates or unemployment, were politically acceptable, and so the exchange rate limitations were abandoned in To find out more, read our updated cookie policy and privacy policy.

Great summary regarding the history of monetary economic systems, from the goldstandart to the post Bretton Woods system. At the root of that failure was the ineluctable rise in international capital mobility, which made currency pegs more fragile and periodic adjustments more difficulty.

The gold standard was abandoned in all but name, and currency could ‘float’ within a narrow band of values tied to the US dollar. The introduction of capital controls and a drastic decline in capital flows after marked the interwar period.

Globalization with Chinese Characteristics

I had been hoping for a tight and sharp history, particularly an explanation of the workings of the gold standard, globa,izao like an extended profile in “The Economist” magazine. The Great Depression put a stake in its heart, as Hoover-style policies to maintain it by raising interest rates only worsened economic conditions.

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