Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (Nber Series on Long-Term Factors in Economic Development) [Paperback]

Barry Eichengreen (Author)

Book Description

Publication Date: February 8, 1996 | ISBN-10: 0195101138 | ISBN-13: 978-0195101133

This book offers a reassessment of the international monetary problems that led to the global economic crisis of the 1930s. It explores the connections between the gold standard--the framework regulating international monetary affairs until 1931--and the Great Depression that broke out in 1929. Eichengreen shows how economic policies, in conjunction with the imbalances created by World War I, gave rise to the global crisis of the 1930s. He demonstrates that the gold standard fundamentally constrained the economic policies that were pursued and that it was largely responsible for creating the unstable economic environment on which those policies acted. The book also provides a valuable perspective on the economic policies of the post-World War II period and their consequences.

Editorial Reviews

Review

"A brilliant new book."--Newsweek

"Very highly recommended."--Choice

"Important and convincingly argued....Even those who are not sympathetic to the arguments and conclusions of this book will agree that it is destined to be an important work for all future students of the gold standard."--Journal of Economic Issues

About the Author

Barry Eichengreen is the John L. Simpson Professor of Economics and Professor of Political Science at the University of California at Berkeley, and Research Associate of the National Bureau of Economic Research. He has written a number of books on international monetary issues and economic history, including Elusive Stability: Essays in the History of International Finance (1990).

Product Details

• Paperback: 480 pages
• Publisher: Oxford University Press, USA (February 8, 1996)
• Language: English
• ISBN-10: 0195101138
• ISBN-13: 978-0195101133
• Product Dimensions: 8.7 x 5.9 x 1.3 inches
• Shipping Weight: 1.6 pounds (View shipping rates and policies)
• Average Customer Review: 3.8 out of 5 stars  See all reviews (6 customer reviews)
• Amazon Best Sellers Rank: #111,437 in Books (See Top 100 in Books)

More About the Author

Barry Eichengreen is George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California, NBER Research Associate, and CEPR Research Fellow. He writes a monthly column for Project Syndicate and periodic columns for Conjuntura Economica (in Brazil), Finanz und Wirtschaft (in Switzerland), and Eurointelligence (in Europe).

Customer Reviews

Most Helpful Customer Reviews

67 of 67 people found the following review helpful:

5.0 out of 5 stars A tremendous trip into la-la land, August 1, 2001

By 

M. Mcfarland - See all my reviews
(REAL NAME)   

This review is from: Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (Nber Series on Long-Term Factors in Economic Development) (Paperback)

Barry Eichengreen's classic tale of financial hubris and mismanagement is almost ten years old. But it's still riveting. It's a broad-sweep introduction for generalists and financial buffs alike. And it's very well written too.

The book begins by describing the inner workings of the gold standard and how it evolved from its inception in the 1800s. This part may be a bit dry for generalists, but once underway all the terms become quite easy to understand. It's worth persevering since WW1changed the way the world worked. In particular, the after effects of the war made staying on gold much more difficult for countries experiencing persistent balance of payments deficits.

After that, Eichengreen goes on a tour of the interwar years and aims to show why the collapse of the gold standard and the plunge into depression had nothing to do with the US stock market and everything to do with rivalries and mismanagment on an international scale. The US crash was a symptom of an international crisis, not the cause.

All the classic powderkegs are there. The UK's mindless attempt to rejoin the gold standard at the overvalued, pre-war rate. Vindictive French domestic politics and the hyperinflations in continental Europe. Vindictive French attempts to humiliate the Germans over reparations. Bank runs in Germany and Austria. French and American attempts to bend the rules of the Gold Standard for their own national interests. Wild swings in capital flows from Europe to the US and back again. And the cataclysmic days of 1931 when the whole system collapsed under the weight of banking crises and currency contagion - in ways very similar to Asia in 1997.

After the crash, we get down to the Great Depression and who fared the best. This part is much shorter since it isn't as complicated. Basically, those countries that devalued quickly and went the free market route fared much better than those that didn't. Sweden was a star performer. The US can be found towards the back of the class. Dear old Blighty gets full marks for going solo, although more recent evidence shows this had more to do with throwing in the towel than playing with new ideas.

Strangely there's little mention of Japan. Nippon took a beating in the late 1920s while the yen remained fixed to gold. Once sterling devalued, the Japanese followed suit. The recovery was swift and full blooded. But the central bank forgot to stop the printing press once growth returned and ended up fighting hyperinflation in the late 1930s. So Eichengreen's line that giving up was the great panacea isn't quite as true as he'd have you believe.

All told, Golden Fetters is great. While it lacks facts and figures on banking problems and doesn't really provide convincing evidence on contagion, it works really well as a diary of contrasting fortunes in Europe and the US after the guns fell silent in 1918. If you like history then this is for you.

27 of 32 people found the following review helpful:

5.0 out of 5 stars Excellent reading!, April 11, 2000

By A Customer

This review is from: Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (Nber Series on Long-Term Factors in Economic Development) (Paperback)

Eichengreen does it again. His easy-reading prose takes the reader through the monetary meanders of the post-WWI scenario, alternating historical narrative with clear, in-depth looks into economic theory and economic thought. The book features a comprehensive analysis of the intricacies of the interwar gold standard. The international conferences, the German hyperinflation, the roller-coaster of the Franc between 1924 and 1926 and the monetary determinants of the Great Depression are studied with extreme accuracy. This magnificient account will not disappoint either the academic reader or the learned non-specialist.

22 of 26 people found the following review helpful:

5.0 out of 5 stars A Landmark Economics Study on the Economics of the Flawed Gold Standard, July 13, 2007

By 

T. Carlsen - See all my reviews
(REAL NAME)   

This review is from: Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (Nber Series on Long-Term Factors in Economic Development) (Paperback)

This is a landmark economics study on the effects of the disastrous gold standard in partly causing the Great Depression, along with the Federal Reserve contracting the money supply, related to the flawed gold standard. This book is intented for advanced economists and is probably not legible for most college-educated people.

Two other essential books on the subject are Essays on the Great Depression by Ben Bernanke, Chairman of the Federal Reserve and America's top economist, and Lessons from the Great Depression (Lionel Robbins Lectures) by Peter Temin, one of the greatest economists of the Great Depression. Those books were also written for economists, although Bernanke's book can be read by average people if you skip around.

The average reader wanting to read about the gold standard in a way that a general reader can understand should read the Pulitzer Prize-winning Freedom from Fear: The American People in Depression and War, 1929-1945 (Oxford History of the United States) by David Kennedy. Kennedy's writes thoroughly about the economics of the Great Depression, yet the Oxford History of the United States is designed for everyone to read.