“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. Eichengreen, B.: Globalizing Capital: a. System. IX, pp. Princeton Univer. US $ Barry Eichengreen at his best: his lat international monetary system.
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Tom rated it liked it Feb 24, I’ll certainly admit that if I had taken the time to review the macroeconomic concepts involved here, which I have learned at least twice before, I probably would’ve gotten more out of the book. An excellent, clearly-written history of 20th century international finance and introduction to international finance for echengreen novice reader. Will demand a second reading shortly, but the first reading nonetheless added greatly to my understanding of the tides of global finance throughout the 20th century and to the ways in which international economic and monetary trends impacted the politics of the eichengreej century.
Globalizing Capital: A History of the International Monetary System
He is a regular monthly columnist for Project Syndicate. The Great Depression put a stake eivhengreen its heart, as Hoover-style eidhengreen to maintain it by raising interest rates only worsened economic conditions. Most interesting to me is the duality post Bretton Woods of the Eicchengreen approach to exchange rates attempt to implement fixed rate and eventually a common currency versus the Anglo approach fully floating currencies, no intervention.
None of the original solutions, raising interest rates or unemployment, were politically acceptable, and capifal the exchange rate limitations were abandoned in Of particular importance was the establishment of central banks, which removed the enforcement of the gold- standard mechanism from the hands of private, competing bankers, increasing the risk of both a suspension of payments and subsequent yielding to inflationary pressures.
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.
It took capotal a while to read it because I had to read it in small bites to keep everything from blurring together. 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. I read this book so I could be a little better informed when talking about the gold standard.
Then there are cases like Austria at the beginning of the Great Depression, a bank failure that might have been bailed out by other countries to protect the international gold standard if those other countries were not recent factors of a bitter war. Aaron Taylor rated it it was amazing Apr 15, Nevertheless, the book provides an excellent overview of major developments that forged the modern global monetary system.
My best guess is that the gold standard prevents speculation, a mechanism for financial markets to cause otherwise-unnecessary panics and crises in the market.
Books by Barry Eichengreen. It is largely compelling, thought-provoking, highly informative, and a pleasure to read. Lists with This Book. However, he shows that capital mobility was also high prior to World War I, yet this did not prevent the maintenance of fixed exchange rates. The advantages and disadvantages of a pegged currency are very well illustrated for the Argentinian case.
Starting from the early days of the markets’ globalization in the late 19th century, he traces the transformation and the trial an error of the different international monetary systems.
Barry Eichengreen, Globalizing Capital
Here central banks played an active role, mainly by trying to run the gold standard on the cheap, supplementing gold reserves with holdings of foreign exchange capiyal of further devaluing their currencies or enduring more deflation so as to achieve a higher, sustainable relative price of gold. Eichengreen does a great job in eichenngreen this complicated subject.
The money supply would rise with a high volume of trade, and inflation would set in, causing the price of goods and services to rise.
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Trivia About Globalizing Capit The pre-war gold standard, the interwar chaos, the Great Depression, the Bretton Woods system, the emergence of the Euro, the current financial markets, the US-China trade imbalances, among others, are all explained in this money glibalizing.
The Canadian case is again relevant here, for Canada had caoital difficulty maintaining its gold standard until while avoiding financial crises without the help of a central bank, even while experiencing massive capital inflows.
Gonnamakeit rated it really liked it Nov 27, In some loose sense, of course, democratic pressures fueled the abandonment of the international gold standard and of later schemes for pegging exchange rates.
The Canadian banks ran into legal limits themselves, which were then loosened. Now Barry Eichengreen presents a brief, lucid eichdngreen that tells the story of the international financial system over the past years.
Zeeshan rated it it was amazing Mar 04, You could either raise interest rates, which leads to inflation, or decrease the money supply.