Globalizing Capital: A History of the International Monetary System (IMF) (Paperback)

~ Barry Eichengreen (Author) "THE INTERNATIONAL monetary system is the glue that binds national economies together..." (more)
Key Phrases: relative wholesale prices, interwar gold standard, mint ratio, United States, Bretton Woods, Bank of England (more...)

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. --This text refers to the Hardcover edition.

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. -- Review

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Product Details

• Paperback: 240 pages
• Publisher: Princeton University Press; Upd Sub edition (July 13, 1998)
• Language: English
• ISBN-10: 0691002452
• ISBN-13: 978-0691002453
• Product Dimensions: 9 x 6.1 x 0.4 inches
• Shipping Weight: 12 ounces (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (8 customer reviews)
• Amazon.com Sales Rank: #691,287 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

32 of 32 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

14 of 16 people found the following review helpful:

3.0 out of 5 stars Great macro text but very G7 centric, June 1, 2001

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

Barry Eichengreen's book Gold Fetters is a classic on the Gold Standard and the Great Depression. The cover of this one claims that it will become a classic on the international monetary system. While it's good, it certainly isn't a classic. It's a great book, but spoilt by its lack of breadth.

Globalizing Capital is full of details and gives readers a terrific account of how mainstream exchange rates were managed (or weren't) in the period from 1870 to 1997. Each of the four main chapters is self contained (1870-1914, 1918-1944, 1944-1973, 1973-1997).

Globalizing Capital has two broad threads. Firstly, the only periods in recent history when exchange rates have been stable have occurred when there have been a) high levels of international co-operation or b) periods when governments have been able to choose between high capital mobility and extending democracy. Trying to court both the masses and international traders has often been the trigger for banking and currency crises.

The second theme is the choice between fixed and floating regimes. The world nowadays is characterised by instantaneous communications and highly mobile capital. Small countries can chose to float and large groups with deep interlinks can form monetary unions, but the rest are faced with increasingly unpleasant choices. As capital becomes more mobile, the choices faced by those left in the middle will become even more perilous.

While the theoretical line is flawless, the content isn't. Globalizing Capital is extremely G7-centred and gives little if any indication that there was a world outside the North Atlantic until Japan emerged in the 1960s. There is little mention of the history of colonial currency boards prior to Hong Kong in the early 1980s, no attempt to tackle the issues thrown up by recent debt crises in Latin America and nothing on transition countries in Eastern Europe and Asia who dispensed with central planning and multiple exchange rates in the 1990s.

7 of 7 people found the following review helpful:

4.0 out of 5 stars Nifty, January 27, 2008

By	Reader (Arlington, Virginia) - See all my reviews

This is a great book for readers who like economic history. In just 200 pages, Eichengreen tells the history of the modern international monetary system, from the classical gold standard of the late 19th century to the Asian financial meltdown of the 1990s. He writes clearly and his narrative never gets bogged down in historical arcana or mathematical abstractions. The book is a great example of how complex economics can be made comprehensible to ordinary readers if the writer sticks to the big picture and uses simple language.

Eichengreen's basic idea is that the rise of democracy made it impossible for central banks to continue to pursue exchange rate stability at the expense of all other economic objectives. That doomed the gold standard and made inevitable a world of floating exchange rates, even though that world would have been unthinkable to most central banks and finance ministries prior to the 1960s and 1970s.

I knocked off one star only because Eichengreen is very U.S./Europe-centric. He barely discusses Japan let alone the developing world. Huge events like the rise of OPEC and the Latin debt crisis of the 1980s are hardly mentioned. For that reason, his book never addresses the way that dependence on international capital flows now constrains policymaking in developing countries almost as much as the gold standard ever did.