Global Imbalances and the Lessons of Bretton Woods (Cairoli Lectures) [Hardcover]

Barry Eichengreen (Author)

Book Description

Publication Date: September 22, 2006 | Series: Cairoli Lectures

In Global Imbalances and the Lessons of Bretton Woods, Barry Eichengreen takes issue with the argument that today's international financial system is largely analogous to the Bretton Woods System of the period 1958 to 1973. Then, as now, it has been argued, the United States ran balance of payment deficits, provided international reserves to other countries, and acted as export market of last resort for the rest of the world. Then, as now, the story continues, other countries were reluctant to revalue their currencies for fear of seeing their export-led growth slow and suffering capital losses on their foreign reserves. Eichengreen argues in response that the power of historical analogy lies not just in finding parallels but in highlighting differences, and he finds important differences in the structure of the world economy today. Such differences, he concludes, mean that the current constellation of exchange rates and payments imbalances is unlikely to last as long as the original Bretton Woods System.Two of the most salient differences are the twin deficits and low savings rate of the United States, which do not augur well for the sustainability of the country's international position. Such differences, he concludes, mean that the current constellation of exchange rates and payments imbalances is unlikely to last as long as the original Bretton Woods System.After identifying these differences, Eichengreen looks in detail at the Gold Pool, the mechanism through which European central banks sought to support the dollar in the 1960s. He shows that the Pool was fragile and short lived, which does not bode well for collective efforts on the part of Asian central banks to restrain reserve diversification and support the dollar today. He studies Japan's exit from its dollar peg in 1971, drawing lessons for China's transition to greater exchange rate flexibility. And he considers the history of reserve currency competition, asking if it has lessons for whether the dollar is destined to lose its standing as preeminent international currency to the euro or even the Chinese renminbi.

Editorial Reviews

Review

"As the United States confronts a future that must grapple with the need to provide adequate health care, rebuild infrastructure, and fund retirement, including covering failed private pensions, this book provides a timely reminder of past successes and past failures at dealing with these issues. There is much to be learned from U.S. fiscal policy over the past sixty years if at least the more obvious mistakes are to be avoided."--Francesco Giavazzi, Bocconi University, Milan

"Eichengreen's book should be the starting point for the debate about what will happen after the inevitable end of an unsustainable system. With this and his many other books, Eichengreen has established himself as one of the most important voices in that debate." Rawi Abdelal Business History Review

Why the current Bretton Woods-like international financial system, featuring large current account deficits in the center country, the United States, and massive reserve accumulation by the periphery, is not sustainable.

"Barry Eichengreen's examination of international monetary history throws much light on current global imbalances and the serious problems they create for the United States."--Robert Solomon, guest scholar, Brookings Institution

"History is not what we can readily recall. It is what we must be made to remember before we draw facile analogies between past and present. In this remarkable book, Eichengreen shows why. The present international monetary system may resemble the earlier Bretton Woods system, but Eichengreen finds big differences and argues that the present system is not likely to endure. We may be closer to the end than to the beginning."--Peter B. Kenen, Senior Fellow in International Economics, Council on Foreign Relations, and Professor of Economics, Emeritus, Princeton University

About the Author

Barry Eichengreen is George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California, Berkeley. He is the author of Capital Flows and Crises (MIT Press, 2002) and other books.

Product Details

• Hardcover: 208 pages
• Publisher: The MIT Press (September 22, 2006)
• Language: English
• ISBN-10: 0262050846
• ISBN-13: 978-0262050845
• Product Dimensions: 8.1 x 5.4 x 0.8 inches
• Shipping Weight: 8 ounces
• Average Customer Review: 4.0 out of 5 stars  See all reviews (2 customer reviews)
• Amazon Best Sellers Rank: #1,729,705 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

23 of 24 people found the following review helpful:

5.0 out of 5 stars econ history pro makes strong concise case, January 11, 2007

By 

dollar bear (honolulu, hi) - See all my reviews

This review is from: Global Imbalances and the Lessons of Bretton Woods (Cairoli Lectures) (Hardcover)

if you want to know how the unprecedented usa current account deficit and "bretton woods 2" stacks up against history, it will be harder to find a better book than this one. Why is the situation the same? why different? what should we expect? these and many more questions are answered in a 4 chapter book that is a MUST read for anyone short the dollar but still a little scared of going up against such large players (the foreign CBs)... the book is meant for people who already have a strong grasp of international monetary theory but no math is involved (so it's a quick read). Well worth the money!

0 of 1 people found the following review helpful:

3.0 out of 5 stars Next Bretton Woods., October 21, 2011

By 

Edoardo Angeloni "Mathematics teacher" (Teramo , Italy) - See all my reviews
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This review is from: Global Imbalances and the Lessons of Bretton Woods (Cairoli Lectures) (Paperback)

Next Bretton Woods system, the gold wasn't ever the principal good for the changes. That produces new situation in the traditional financial back-ground. The USA accepted to mantain the dollar as substitute of the gold, but this fact is related to their influence.
The richness of the Asia countries modifies partially this context, but it isn't very clear the true role of China in the economic equilibria. If before Bretton Woods the great part of the economiy was sthatic, next we must talk about dynamic and not-linear conditions.