Globalizing Capital [Hardcover]

Barry Eichengreen (Author)

Book Description

ISBN-10: 069102880X | ISBN-13: 978-0691028804 | Publication Date: October 28, 1996

The importance of the International Monetary System is evident in the daily news stories about fluctuating currencies and in dramatic events, such as the recent reversals in the Mexican economy. It has become increasingly apparent that one cannot understand the international economy without knowing how its monetary system operates. This volume tells the story of the international financial system over the past 150 years. It 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. The book demonstrates that insights into the International Monetary System and effective principles for governing it can result only if is seen as a historical phenomenon extending from the gold standard period to interwar instability, then to Bretton Woods and, finally, to the post-1973 period of fluctuating currencies. Eichengreen analyzes the shift from pegged to floating exchange rates in the 1970s, and ascribes that change to the growing capital mobility that has made pegged rates difficult to maintain. 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. What was critical for the successful maintenance of fixed exchange rates during that period was the fact that governments were relatively insulated from democratic politics and, thus, from pressure to trade off exchange rate stability for other goals, such as the reduction of unemployment. Today, pegging exchange rates would require very radical reforms of a sort that governments are understandably reluctant to embrace. The implication seems undeniable: floating rates are here to stay. Barry Eichengreen is the author of "Golder Fetters: The Gold Standard and the Great Depression, 1918-1939".

Editorial Reviews

From Library Journal

Eichengreen (Univ. of California-Berkeley), the author of Golden Fetters: The Gold Standard and the Great Depression, 1918-1939 (Oxford Univ., 1992), uses a detailed history of exchange rate systems to support his theory that the democratization of political processes has presented competing goals to policymakers, making it more difficult for them to commit to fixed rates of exchange. His explanation for the movement toward floating exchange rates is controversial but well argued. The information he cites is current, and he incorporates a discussion of the European Monetary System and its future. Eichengreen's presentation of history is solid, with ample references. General readers will benefit from the glossary of his technical terms. His book will be the most useful to economists, historians, political scientists, and finance professionals.?A.J. Sobczak, formerly at California State Univ., Northridge
Copyright 1996 Reed Business Information, Inc.

Review

"Capital flows in the recent period, unlike those in the earlier one, proved to be incompatible with exchange rate stability. [Eichengreen's] reasons for the difference. . . constitute a unique insight and contribution. . . to the professional literature on a familiar topic." -- Choice

Capital flows in the recent period, unlike those in the earlier one, proved to be incompatible with exchange rate stability. [Eichengreen's] reasons for the difference. . . constitute a unique insight and contribution. . . to the professional literature on a familiar topic. -- Review

Eichengreen's purpose is to provide a brief history of the international monetary system. In this, he succeeds magnificently. Globalizing Capital will become a classic. -- Douglas Irwin, University of Chicago

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Product Details

• Hardcover: 232 pages
• Publisher: Princeton University Press (October 28, 1996)
• Language: English
• ISBN-10: 069102880X
• ISBN-13: 978-0691028804
• Product Dimensions: 9.4 x 6.3 x 0.7 inches
• Shipping Weight: 1.2 pounds
• Average Customer Review: 5.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #1,407,815 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

44 of 44 people found the following review helpful:

5.0 out of 5 stars Crucial for understanding today's global financial crisis., October 5, 1998

By A Customer

This review is from: Globalizing Capital (Hardcover)

Globalizing Capital: A History of the International Monetary System is better described by its subtitle than its title, but even that fails to suggest just how up-to-the-minute it is. This book really provides a crucial key for unlocking the puzzles of today's global financial crisis. It tells the whole story of how the gold standard worked, how the Bretton Woods system worked -- and why and how they stopped working. If you wonder what the differences between floating and fixed exchange rates really are, this book will tell you, in all dimensions. It shows very clearly that the international financial crisis we see today is a great deal like what has happened at some times in the past, and it explains what worked, what didn't, and why in the past in dealing with similar crises. The author's entirely non-ideological -- where there are two intellectually-respectable sides to an issue, he presents both, explains why he comes down as he does, and tells you where to look for more information. The book is brief (about 200 pages), well and clearly written, and doesn't assume that you know much about economics or banking. There's a nice glossary in the back which explains all those mysterious terms you hear about these days. I understand that the new paperback edition has been updated to carry the story right up through the Asia crisis.

W. D. O'Neil