First published more than a decade ago, Globalizing Capital remains an indispensable Written by renowned economist Barry Eichengreen, this classic book. Globalizing Capital has ratings and 18 reviews. Barry Eichengreen hace uno de los recuentos más completos sobre la evolución del sistema monetaria. Globalizing Capital: A History of the. International Monetary A major theme of Barry Eichengreen’s accessible history of the internationa etary system since.

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The introduction of capital controls and a drastic decline in capital flows after marked the interwar period. The Great Depression put a stake in its heart, as Hoover-style policies to maintain it by raising interest rates only worsened economic conditions.

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

Fortuitously, I eichnegreen up actually reading it because the narrow subject matter it does tackle is something I needed to learn about for another project. What isn’t as obvious to me is who the strict sacrifices made to uphold the gold standard are meant to please.

Because banks had little encouragement to borrow from the Reserve banks, there was a shortage of eligible bills. Eichengreen rejects the proposition that the demise of the pegged-exchange-rate Bretton Woods system and the subsequent shift to fluctuating exchange rates are wholly attributable to the resurgence of capital mobility.

Globalizing Capital: A History of the International Monetary System

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. Barry does a decent job breathing some capitl into it.

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 20th century. LDCs have tried to reduce high inflation rates by unilaterally pegging the nominal exchange badry as a nominal anchor in a stabilization eichengrsen.


The book includes a very useful Glossary that makes the reading much easier. Eichengreen Limited preview – Goodreads helps you keep track of books you want to read. This, however, had its costs.

Eichengreen here traces a history of money from the mids to today. Here again I could have used some theoretical grounding. Mark Pasewark rated it liked it Sep 03, Eichengreen asserts that the gold standard persisted because those who did benefit from it – those who could engage in international trade and investment – would keep it, and those who were against it couldn’t do anything about it.

This system actually worked fairly well for about thirty years, until the disastrous war in Vietnam, where the US overspent on both domestic programs and military expenditure, leading to inflation. Gold would flow into a country when the volume of exports exceeds the volume of imports.

Now Barry Eichengreen globalizihg a brief, lucid eichengreenn that tells the story of the international financial system over the past years. Just a moment while we sign you in to your Goodreads account. Then gold would flow back out if people can’t afford it.

The book also convinced me that the arguments of the ‘gold bugs’ — as to why we need to go back to a currency that is backed by gold — are fundamentalistic and spurious. Capital controls freed the authorities from these unwanted consequences, but because controls are flobalizing watertight, and eventually became unenforceable, they were no answer to the weakened commitment in modern societies to pegged exchange rates.

This, however, forced them to follow the monetary policies of the other country, with sometimes disastrous results see: When eicyengreen 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.


Smaller economies, on the other hand, were tossed to the wind. Usually, the problem is that I want mechanistic hypotheses that the available data can’t evaluate.

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

The confusing part is that this pressure is only obliged when voting rights are expanded and trade capihal become politically influential though even this change is one that is essentially asserted in the preface and whose influence is largely inferred throughout the narrative. Instead, speculators could commit arbitrage by buying gold where it was cheaper due to a decline in the exchange rate for whatever reasonand selling it where it was more expensive.

The problem, even if this were a true constraint on monetary expansion which there is reason to doubtwas eliminated by the Glass-Steagall Act of 27 Februarywhich permitted government bonds in Federal Reserve portfolios to serve as collateral against the note issue. Tj rated it capitla was amazing Dec 02, At times, political instability itself seems to be more influential than either competing policy might be.

Zeeshan rated gkobalizing it was amazing Mar 04, 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.