Monetary Regimes and Policy on a Global Scale (original) (raw)
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Monetary Regimes and Policy on a Global Scale: The Oeuvre of Michael D. Bordo
Essays to Commemorate the Federal Reserve System's Centennial, 2015
Michael D. Bordo has helped to define the modern field of monetary history, drawing from it important policy lessons for current practitioners. For his seventieth year, we survey his contributions to our understanding of the Great Depression, money and the economy in historical perspective, exchange rate regimes including the gold standard, Bretton Woods, and the European Monetary Union, globalization, financial crises, the Canadian monetary experience, and historical guidance for monetary policy.
A Brief History of the International Monetary System
2006
This paper provides a brief overview of the introduction and development of the international monetary system (IMS) from its inception in the 5th century BC to the present era. Particular reference is made from the establishment of the gold standard in the early 19th century under British hegemony to the Bretton Woods system under American hegemony and its evolution into the current system of fiat money, floating exchange rates and global financial flows. It explains the role and significance of the IMS for monetary stability and prosperity, and discusses the current challenges and its future outlook.
The Past and Future of the International Monetary System
ЭКОНОМИЧЕСКОЕ ВОЗРОЖДЕНИЕ РОССИИ (Economic Revival of Russia) периодическое научное Издание (Scientific Periodical), EKONOMICHESKOYe VOZROZHDENIYe ROSSII periodicheskoye nauchnoye Izdaniye,, 2019
Despite signs over the decades that the world role of the dollar has been problematic, and much recent commentary pointing to signs that de-dollarization is happening, questioning of the role of the dollar in the international monetary system has been remarkably untheoretical and unhistorical fashion. Since no heap of facts, no matter how large, can amount to an argument, this is a serious intellectual liability. Moreover, the world has been paying, at least the 1980s, a heavy price for this lack of understanding. The purpose of this paper is to clear up this misunderstanding by pointing to the largely ignored intimate and necessary relationship between financialization-of the Western economies and the pressures they generate for the rest of the world to follow suit, exposing them to dangerous financial and currency volatility-and the dollar-centred international monetary system. This relationship can only be understood by putting the dollar's world role in the longer historical perspective of the modern international monetary system, going back to the role of the pound sterling under to so-called international gold standard.
The Gold Standard and the Origins of the Modern International Monetary System
This article explores the ways in which the classical gold standard established the foundations for a modern international monetary system with its distinctive forms of crisis and regulatory frameworks. The specific nature of this transformation is often overlooked because of a tendency in the literature to compare the gold standard in relation to subsequent monetary systems, such as BrettonWoods. To remedy this historical bias, the classical gold standard is compared with previous monetary systems and it is concluded that it contributed to expand the array of monetary instruments for conducting monetary policy. By progressively subjecting the management of fiduciary money to state control the institutions of the gold standard created a new monetary framework that opened the way for central banking. However, the commitments taken to this effect, such as provisions on the convertibility of banknotes, created new opportunities for speculation. I argue that this new weakness would become the main preoccupation of monetary policy in the 20th century and lay down the foundations for international cooperation and its novel emphasis on monetary stability.
In the analysis of the present day crisis, the paper considers a result of commercial banks deregulation: blowing financial transactions, widespread new Keynesian flow of marginal monetary basis, jumpstarting financial instruments, short-term based financial program trading speculation. In this way, the research starts from the last market bubbles collapsed in the years 2000 and 2007-2008: dot-com, subprime and derivatives. Its results confirm the effect of the general persistence of wrong monetary policies, triggering irreversible liquidity, fiscal and interest zero rates traps. The conclusion is that an everlasting crisis is not the consequence of some isolate deregulation of some institution and markets activity in general, neither likely due to some new financial innovative product fallout. On the contrary, what surfaces in August 2007, is the result, after 40 years of monetary debasement and quantitative mismanagement, excessive faith in macroeconomics dangerous ideas and disregard of minor micro-economic laws, associated with the appearance of the huge Eastern competing world, once frozen in the planned economy, a global market oriented environment. The Western welfare State seems likely to finally collapse in a completely free surfacing new market economy. The present paper explores the history and grounds of recent monetary turmoil considering some preliminary factors affecting the debasement of the US dollar in the year 1971 and the unexpected consequences arising from such a controversial decision. After World War I and 30 years of unsuccessful efforts to reach a stable international payment system, the recurring clearing agreements, the final establishment of the Bank for International Settlements in Basel, the GATT and the World Bank, Europe seemed to be finding an alternative solution to the autarchy and tight custom barriers, which led to World War II. Several monetary plans, drawn and discussed at Bretton Woods in July 1944 and, after World War II: the European monetary union, the Werner plan, the issuing of the European Currency Unit (ECU), the final financial markets liberalization in the year 1990 culminated in the EMS and the Euro project. The European monetary system led to the issue of the Euro that made likely a debased monetary instrument as final unique solution, within the Single European Payment Area run over the Swift—Target platforms. According to the Mario Pines, full professor,
History International Monetary
The international monetary system is the structure within which foreign exchange rates are determined, international trade and capital flows are accommodated, and balance-of-payments adjustments made. This article will discuss the evolution of the international monetary regimes starting from the pre 1875, metalism standard to date when the flexible exchange rate regime now operating since 1973. The other regimes are the classical gold standard, inter war period, the fixed dollar exchange rate regime under the Bretton Woods system after the WWII. When discussing the monetary regimes highlights of the strengths and weaknesses of each regime will be brought out, and thereafter form a conclusion about the most beneficial and stable regime.