Customer Reviews

Monetary Regimes and Inflation: History, Economic and Political Relationships

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The author breaks the book into historical examples. From these examples he draws conclusions which are written out at the end of each subchapter. He looks back at these conclusions and sees if they hold up under other circumstances in future chapters.

Historical data include a prce index of rice in Ming China, Inflation in revolutionary America, and Florian exchange rates in medieval Italy.

He is apolitical, and from Switzerland. So, to an American, it does not matter what political party you are.

If you are interested in how politics and monetary policy interact with each other to cause inflation and boom/busts, this book is for you. It has definite lessons that we shed light on today's economy. Particularly, the "caps" and "hats" political parties in Sweden, and their inflation plight.

This is a book I will 100% read multiple times. I can only say that about 3 other books. I reccomend this book with no reservations.

I did not ask for this book, but I am glad the publisher sent it to me for free. There is a lot of concern over inflation in the present era, but not a lot of structured thought about what drives inflation.

This book takes the long term perspective, and looks at the wide array of monetary arrangements, and analyzes which arrangements produced more or less price inflation. The author shows that there is generally an inflationary bias in all currencies. Currencies that are backed by precious metals tend to experience less inflation, but many governments using such currencies debase the metals or clip the coins. That said, it does restrain inflation, because inflating a metallic-based currency takes a lot of work.

To have significant inflation, one must have unbacked paper money. The same is true of defaults in bonds. In order to have a crisis, much debt must be issued relative to the assets and earning power of the companies. The debt is not backed by sufficient repayment capacity, and thus there are some defaults.

A fiat currency in and of itself, is not sufficient to create hyperinflation. Hyperinflation only happens when the government finances itself by printing money with abandon.

The book further distinguishes itself by explaining situations where foreign currencies come in to act as shadow currencies inside nations. Further, the book describes how inflationary situations end. One constant is that people quickly analyze where purchasing is declining, and seek stability through metals or relatively stable fiat currencies.

One strength of the book is that at the end of each chapter, the author summarizes all of the main points. I recommend this book.

Quibbles

The book is not dry, but it has a distinctly academic feel. Not everyone will take to the book easily.

Who would benefit from this book?

Economists would benefit from the book, and also those that like reading about the history of inflation. Few things truly change in History; the names may change, but we make the same mistakes.