Do Old Habits Die Hard? Central Banks and the Bretton Woods Gold Puzzle PDF Download

Author: Eric Monnet
Publisher: International Monetary Fund
ISBN: 1498326773
Category : Business & Economics
Languages : en
Pages : 32

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Book Description
Why did monetary authorities hold large gold reserves under Bretton Woods (1944–1971) when only the US had to? We argue that gold holdings were driven by institutional memory and persistent habits of central bankers. Countries continued to back currency in circulation with gold reserves, following rules of the pre-WWII gold standard. The longer an institution spent in the gold standard (and the older the policymakers), the stronger the correlation between gold reserves and currency. Since dollars and gold were not perfect substitutes, the Bretton Woods system never worked as expected. Even after radical institutional change, history still shapes the decisions of policymakers.

Author: Eric Monnet
Publisher: International Monetary Fund
ISBN: 1513508857
Category : Business & Economics
Languages : en
Pages : 32

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Book Description
Why did monetary authorities hold large gold reserves under Bretton Woods (1944–1971) when only the US had to? We argue that gold holdings were driven by institutional memory and persistent habits of central bankers. Countries continued to back currency in circulation with gold reserves, following rules of the pre-WWII gold standard. The longer an institution spent in the gold standard (and the older the policymakers), the stronger the correlation between gold reserves and currency. Since dollars and gold were not perfect substitutes, the Bretton Woods system never worked as expected. Even after radical institutional change, history still shapes the decisions of policymakers.

Author: Eric Monnet
Publisher: University of Chicago Press
ISBN: 0226834131
Category : Business & Economics
Languages : en
Pages : 212

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Book Description
"Reconsidering the limits-past, present, future-of the financial institutions that stand between us and the abyss. Two financial crises in two decades have expanded and diversified the roles of central banks in the twenty-first century. With the 2008 crash, they became the lenders of last resort in monetary policy; with Covid-19, they became underwriters of the public welfare. Both powers are expansive, unchecked, and inherently political. Is this democracy? In Balance of Power, economist and historian Éric Monnet traces the rise of the central banks-from their public-private origins to their current portfolio, which spans everything from interest rates to international relations-to make an urgent and erudite argument: the central banks are no longer independent, if they ever were. And our ability to subject them to democratic rule will go a long way in wielding their expansive powers effectively in societies that face multiple crises at once. Eschewing the traditional storytelling around the birth of central banks and their operational independence, Monnet shows how the power of central banks flows from their origins as a part of the welfare state: they were the financial apparatus used to stabilize societies after World War II, and they have never abdicated that role since. Today it can be seen in the central banks' role as insurance providers-the backstop institution of bailouts, stimuli, and rescue plans. As new challenges emerge, including the boom of digital currencies and the simmering crisis of climate change, central banks will necessarily have to break the glass on longstanding taboos of monetary policy. With this creeping expansion well underway, Monnet offers a trenchant, deeply erudite case for what a democratic central bank can look like"--

Author: Daniel McDowell
Publisher: Oxford University Press
ISBN: 0197679870
Category : Political Science
Languages : en
Pages : 257

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Book Description
The US dollar is the world's indispensable currency. The dollar's preeminent status gives the United States enormous coercive powers which it flexes in the form of financial sanctions to punish its adversaries. Over the last twenty years, Washington has relied on financial sanctions with greater and greater frequency. Bucking the Buck argues that the more the United States wields the dollar as a weapon of foreign policy, the more its adversaries will move their international economic activities into other currencies to avoid Washington's coercive reach. Through a combination of case studies and statistical analysis, the book establishes a relationship between US financial sanctions and the rise of "anti-dollar" policies, which are designed to reduce an economy's reliance on the US currency. Though some anti-dollar policies fail to achieve this goal, McDowell's analysis indicates that in many cases they are successful. Patterns of "de-dollarization" following sanctions are clear. In some cases, the anticipation of future sanctions may provoke similar policy measures. Though McDowell does not conclude that sanctions threaten the dollar's status as the world's key currency, the potential consequences of sanctions overuse remain important. Most notably, the use of sanctions may, over time, weaken their effectiveness as US adversaries develop systems and methods to minimize costs associated with such measures. If the United States wishes to preserve the potency of financial sanctions and protect the dollar's dominant position in the world economy, Bucking the Buck argues that Washington's approach to sanctions use should become more discerning.

Author: Mr. Serkan Arslanalp
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 37

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Book Description
After moving slowly downward for the better part of four decades, central bank gold holdings have risen since the Global Financial Crisis. We identify 14 “active diversifiers,” defined as countries that purchased gold and raised its share in total reserves by at least 5 percentage points over the last two decades. In contrast to the diversification of foreign currency reserves, which has been undertaken by advanced and developing country central banks alike, active diversifiers into gold are exclusively emerging markets. We document two sets of factors contributing to this trend. First, gold appeals to central bank reserve managers as a safe haven in periods of economic, financial and geopolitical volatility, when the return on alternative financial assets is low. Second, the imposition of financial sanctions by the United States, United Kingdom, European Union and Japan, the main reserve-issuing economies, is associated with an increase in the share of central bank reserves held in the form of gold. There is some evidence that multilateral sanctions imposed by these, and other countries have a larger impact than unilateral sanctions on the share of reserves held in gold, since the latter leave scope for shifting reserves into the currencies of other non-sanctioning countries.

Author: Nicolas Barreyre
Publisher: Springer Nature
ISBN: 3030487946
Category : Business & Economics
Languages : en
Pages : 593

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Book Description
This book analyzes public debt from a political, historical, and global perspective. It demonstrates that public debt has been a defining feature in the construction of modern states, a main driver in the history of capitalism, and a potent geopolitical force. From revolutionary crisis to empire and the rise and fall of a post-war world order, the problem of debt has never been the sole purview of closed economic circles. This book offers a key to understanding the centrality of public debt today by revealing that political problems of public debt have and will continue to need a political response. Today’s tendency to consider public debt as a source of fragility or economic inefficiency misses the fact that, since the eighteenth century, public debts and capital markets have on many occasions been used by states to enforce their sovereignty and build their institutions, especially in times of war. It is nonetheless striking to observe that certain solutions that were used in the past to smooth out public debt crises (inflation, default, cancellation, or capital controls) were left out of the political framing of the recent crisis, therefore revealing how the balance of power between bondholders, taxpayers, pensioners, and wage-earners has evolved over the past 40 years. Today, as the Covid-19 pandemic opens up a dramatic new crisis, reconnecting the history of capitalism and that of democracy seems one of the most urgent intellectual and political tasks of our time. This global political history of public debt is a contribution to this debate and will be of interest to financial, economic, and political historians and researchers. Chapters 13 and 19 are available open access under a Creative Commons Attribution 4.0 International License via link.springer.com.

Author: Cecilia M. Bailliet
Publisher: Edward Elgar Publishing
ISBN: 180392375X
Category : Law
Languages : en
Pages : 473

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Book Description
This comprehensive and insightful Research Handbook addresses the interpretation of international solidarity within topical legal regimes and regional systems, as well as in relation to decolonization and the concepts of Ummah and Ubuntu. It examines the way in which international solidarity enables the global community to respond to intercontinental challenges, including climate change, forced migration, health emergencies, and inequality.

Author: David James Gill
Publisher: Yale University Press
ISBN: 0300268602
Category : Business & Economics
Languages : en
Pages : 414

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Book Description
Rethinking the causes and consequences of Britain’s default on its First World War debts to the United States of America The Long Shadow of Default focuses on an important but neglected example of sovereign default between two of the wealthiest and most powerful democracies in modern history. The United Kingdom accrued considerable financial debts to the United States during and immediately after the First World War. In 1934, the British government unilaterally suspended payment on these debts. This book examines why the United Kingdom was one of the last major powers to default on its war debts to the United States and how these outstanding obligations affected political and economic relations between both governments. The British government’s unpaid debts cast a surprisingly long shadow over policymaking on both sides of the Atlantic. Memories of British default would limit transatlantic cooperation before and after the Second World War, inform Congressional debates about the economic difficulties of the 1970s, and generate legal challenges for both governments up until the 1990s. More than a century later, the United Kingdom’s war debts to the United States remain unpaid and outstanding. David James Gill provides one of the most detailed historical analyses of any sovereign default. He brings attention to an often-neglected episode in international history to inform, refine, and sometimes challenge the wider study of sovereign default.

Author: Bernard A. Lietaer
Publisher: New Media German Language
ISBN: 9781400039425
Category : Business & Economics
Languages : de
Pages : 0

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Book Description
Today's financial system is seen by the most as having a fixed size. Bernard A. Litaer challenges this perspective by showing that there were different economic systems in history and that our present system has arisen from a tacit and problematic collective acceptance. He sees the future in the development of complementary currencies. He explains which money is necessary for which needs and how we can commonly create it. Money only exists because of trust -- where trust has been destroyed, money is loosing its value; chaos and poverty are sad consequences. Lietaer has written an exciting and informative book for anyone who is aware of economic problems, from interested laymen to bankers. Das Geld- und Finanzsystem, wie wir es heute kennen, wird von den meisten als feste Grosse, ja als gottgegeben betrachtet. Bernard A. Lietaer zeigt dagegen, dass es im Laufe der Geschichte ganz andere Systeme gegeben hat und unsere derzeitige Finanzordnung einer stillschweigenden -- inzwischen hochst problematischen -- kollektiven Ubereinkunft entspringt. Die Zukunft sieht er in der Entwicklung von komplementaren Wahrungen. Er erlautert, welches Geld wir fur welche Aufgabe benotigen und wie wir es gemeinsam erschaffen konnen. Denn Geld besteht nur aufgrund von Vertrauen. Wo dieses Vertrauen zerstort wird, verliert Geld seinen Wert; Chaos und Armut sind die traurigen Folgen. Lietaer hat ein ebenso spannendes wie informatives "Enthullungsbuch" geschrieben, das sich vom interessierten Laien uberneugierige Banker an alle wendet, die sich der Geldproblematik bewusst sind.