“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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Most interesting to me is the duality post Bretton Woods of the European approach to exchange rates attempt to implement fixed rate and eventually a common currency versus the Globaliaing approach fully floating currencies, no intervention.

Here central banks played an active role, mainly caiptal trying to run the gold standard on the cheap, supplementing gold reserves with holdings of foreign exchange instead of further devaluing their currencies or enduring more deflation so as to achieve a higher, sustainable relative price of gold. It has become increasingly apparent that one cannot understand the international economy without knowing how its monetary system operates.

However, the book suggests that this was a globalizinh speculation is more limited by fundamental shifts than imagined and when those fundamentals are bad, the crises will occur regardless of the standard.

Globalizing Capital: A History of the International Monetary System

The book also convinced me that the arguments of globalizinh ‘gold bugs’ — as to why we globalixing to go back to a currency that is backed by gold — are fundamentalistic and spurious. Globalizing Capital is intended not only for economists but also for a general audience of historians, political scientists, professionals in government and business, and anyone with a broad interest in international economic and political relations.


Unlike other contemporary economists, the author is fair and non-partisan.

The exchange of goods in foreign markets became much less complicated, and money became fully convertible. Even Marshall, whom Eichengreen cites as a critic of globaliizing, suggested that the deflation might actually have been beneficial.

Globalizing Capital: A History of the International Monetary System

The Euro experiment and how we don’t know yet if it’s going to work is also an interesting case study, but the author also points out the advantages of the European currency and why it became an alternative to the Dollar so fast. Paperbackpages. Apr 08, Erin rated it liked it. None of the original solutions, raising interest rates or unemployment, were politically acceptable, and so the exchange rate limitations were abandoned in Overall, it seems like there is no ultimately effective way to avoid large fluctuations in currency value.

Most of the book is centered in the developed countries, but the last chapter also covers the crisis in Argentina, Turkey, and other emerging markets. Brad rated it really liked it Jul 15, The Evolution of a Nineteenth-century Atlantic No wonder economics is called the “dead science”.

Aaron Taylor rated it it was amazing Apr 15, 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. That being said, Eichengreen did a masterful job. The ultimate failure of all such arrangements, as well as the abandonment of the international gold standard itself, has led Berkeley economist Barry Eichengreen to wonder whether any system of fixed, or at least relatively stable, exchange rates can survive in a world of democratic governments.


He made a mistake in calculating the prices of silver and gold and their ratios in currency, driving silver out of circulation and thus leaving England with a gold-backed currency.

In this, he succeeds magnificently. Williamson Limited preview – Eichengreen here traces a history of money from the mids to today.

Barry Eichengreen, Globalizing Capital

Protectionism seems like a tempting option, but the s show why that isn’t the best option. There is clearly a collective action problem at work in the system.

This was also concurrent with advances in transportation and communication, like steam power and the telegraph. Eichengreeb initially shelved this to read on the hoped-for assumption that it was a more ambitious book than it is. Investors who own debt sufficient to see the value of that debt diminished by inflation and augmented by deflation. The bank provided attendees with complimentary copies of books written by conference speakers.

Businesses, due to the higher interest eichengrene, would be unable to earn credit and debtors have to pay more interest on their loans. Tj rated it it was amazing Dec 02, However, he shows that capital mobility was also high prior to World War Globaljzing, yet this did not prevent the maintenance of fixed exchange rates.