Globalizing Capital

Preface vii Chapter One: Introduction 1 Chapter Two: The Gold Standard 6 Prehistory 7 The Dilemmas of Bimetallism 8 The Lure of Bimetallism 12 The Advent of the Gold Standard 15 Shades of Gold 19 How the Gold Standard Worked 24 The Gold Standard as a Historically Specifi c Institution 29 International Solidarity 32 The Gold Standard and the Lender of Last Resort 34 Instability at the Periphery 37 The Stability of the System 41 Chapter Three: Interwar Instability 43 Chronology 44 Experience with Floating: The Controversial Case of the Franc 49 Reconstructing the Gold Standard 55 The New Gold Standard 59 Problems of the New Gold Standard 61 The Pattern of International Payments 66 Responses to the Great Depression 70 Banking Crises and Their Management 73 Disintegration of the Gold Standard 75 Sterling's Crisis 78 The Dollar Follows 83 Managed Floating 86 Conclusions 89 Chapter Four: The Bretton Woods System 91 Wartime Planning and Its Consequences 94 The Sterling Crisis and the Realignment of European Currencies 100 The European Payments Union 104 Payments Problems and Selective Controls 107 Convertibility: Problems and Progress 111 Special Drawing Rights 115 Declining Controls and Rising Rigidity 118 The Battle for Sterling 123 The Crisis of the Dollar 126 The Lessons of Bretton Woods 132 Chapter Five: After Bretton Woods 134 Floating Exchange Rates in the 1970s 136 Floating Exchange Rates in the 1980s 142 The Snake 149 The European Monetary System 157 Renewed Impetus for Integration 164 Europe's Crisis 168 Understanding the Crisis 172 The Experience of Developing Countries 178 Conclusions 183 Chapter Six: A Brave New Monetary World 185 The Asian Crisis 192 Emerging Instability 198 Global Imbalances 210 The Euro 219 International Currency Competition 225 Chapter Seven: Conclusion 228 Glossary 233 References 241 Index 259

Barry Eichengreen is Professor of Political Science and Economics at the University of California, Berkeley. He has written for the Financial Times, Wall Street Journal, Foreign Affairs, and other publications.

Praise for the first edition: "This book by a prominent historian is a succinct and well-written history of the international monetary system... [It] provides useful historical background for understanding current European efforts to create a monetary union."--Richard N. Cooper, Foreign Affairs Praise for the first edition: "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."--Choice