Reading: Barry Eichengreen (2008): Globalizing Capital: A History of the International Monetary System
Barry Eichengreen (2008): Globalizing Capital: A History of the International Monetary System (Princeton: Princeton University Press: 0691139377) http://amzn.to/2kG1v57
Chapter 1: Introduction: Six Questions:
- In what sense is the international monetary system key "glue" for the cross-country global division of labor?
- What are "international capital markets"?
- What is the connection between flexibility of exchange rates and the magnitude of international capital flows?
- Why does the standard explanation of the development of the international monetary system—in terms of a steadily increasing tide of globalization in response to falling transport and communication costs—simply not work?
- Why does Eichengreen divide the period from 1850 into five different "régimes"? What themes are common across two or more of these "régimes"? What these are different?
- How have governments' objectives with respect to the international monetary system changed over the past nearly two hundred years?
- "Network externalities." What are they? Why are they important?
- What did Karl Polanyi write back in 1944? Why is it important? Why is it more important now than it was when Barry began working on this book in the 1990s?
Chapter 2: The Gold Standard: Five Questions:
- How did the classical--that is, the post-1869 and pre-1914--gold standard develop? Who thought it was a good idea? Why did they carry the day?
- How did the pre-1914 gold standard "work" to govern international values and investment flows, anyway?
- Was the classical gold standard a good deal for those Northwest European economies at the world economy's then-core?
- Was the classical gold standard a good deal for the other economies at the world economy's then periphery? Why?
- What was the gold standard's Achilles's heel?
Chapter 3: Interwar Instability: Five Questions:
- What factors would have made the gold standard work less well as a global societal mechanism for managing values and investment flows after 1914, even had World War I not come along?
- How did World War I disrupt the system?
- Why did so many people decide that the system was worth reestablishing after World War I—even at very substantial cost?
- Why did the interwar gold standard system collapse? How did French and U.S. policies contribute to its collapse?
- Is it likely that the interwar gold standard system could have survived for long even if France and the U.S. had followed the "rules of the game"?
Chapter 4: The Bretton Woods System: Five Questions:
- How did John Maynard Keynes and Harry Dexter White hope to build a system to gain the advantages of the gold standard and yet avoid its problems--especially those that had turned the interwar gold standard into such a disaster?
- Did the Bretton Woods system that Keynes and White built function as they expected? In what ways did it do so? In what ways did it fail to do so?
- Was the Bretton Woods system in its heyday a good thing? In what respects was it? In what respects was it not?
- Why did the Bretton Woods system come under pressure starting in the mid-1960s?
- Why did the Bretton Woods system collapse in the early 1970s?
Chapter 5: After Bretton Woods: Three Questions:
- What did Nixon-era U.S. Treasury Secretary John Connally mean when he said: "It's our currency, but it's your problem"?
- Why did major currencies wind up floating against one another in the 1970s and 1980s? What advantages did this floating system have? What disadvantages?
- What path did Europe fall after the early 1970s collapse of Bretton Woods? Why did it collapse in 1992? Why did Europe respond by deciding to create the euro?
Chapter 6: A Brave New Monetary World: Four Questions:
- The Mexico, Pacific Asia, Brazil, Turkey, and Argentina crises of the 1990s and early 2000s--how were those handled in the international monetary non-system of the late twentieth century?
- How did rising China try to integrate itself into the world monetary and financial system?
- What were the "global imbalances" of the late 1990s and thereafter? Why were they seen as a problem? What were the feared catastrophes that could result from them? Did any of the feared catastrophes take place?
- How did the euro work in its first years?
Chapter 7: Conclusion: Four Questions:
- Eichengreen says that stable exchange rates can be maintained with free trade and "fettered finance". What is "fettered finance"? Why is the combination of free trade and "fettered finance" unstable?
- Volatile floating exchange rates and free international investment flows can be attained at the price of large swings in imports and exports and thus in the profitability of domestic factories--and jobs. Why is this unstable?
- Free international flows of investment and stable currency values can be sustained by requiring licenses for imports and exports. Why has no country hitherto adopted such policies recently?
- What changes does Barry Eichengreen now have to make when he revises his book to make a third edition?