Abstract
Following the critical review of microeconomic aspects of economic integration in the form of customs unions, the creation of a single internal market, together with the macroeconomic issue of monetary union, this chapter explores lessons that could be applied in today’s environment from examining how seemingly successful fixed-rate regimes (e.g. the classical Gold Standard and Bretton Woods) each helped to establish an international economic environment that facilitated decades of economic expansion before a combination of political and economic factors forced their ultimate termination. Indeed, a badly constructed fixed exchange rate system, such as the 1920s return to the Gold Standard on pre–First World War parities or Exchange Rate Mechanism membership at too high a parity, has been associated with economic recession, bankruptcies, house price collapses and mass unemployment. Consequently, while a properly constructed system can be a benefit to participating countries, a badly designed regime can cause untold damage to its members.
This is a preview of subscription content, log in via an institution to check access.
Bibliography
Aisen, A. and Jos Veiga, F. (2005). The Political Economy of Seigniorage. IMF Working Paper, 1(1), p. 3.
Baimbridge, M. and Whyman, P. B. (2008). Britain, the Euro and Beyond. Ashgate, Aldershot.
Blanchard, O.J. and SaKong I.I. (2011). Reconstructing the World Economy. International Monetary Fund Publication Services, Washington, p. 126.
Blokker, N.M. and Muller, A.S. (1994). Towards More Effective Supervision by International Organizations, Volume 1. Kluwer Academic Publishers, The Netherlands.
Bordo, M. (1993a). The Gold Standard, Bretton Woods and Other Monetary Regimes: An Historical Appraisal, NBER Working Paper No. 4310.
Bordo, M.D. (1993b). The Gold Standard, Bretton Woods and Other Monetary Regimes: A Historical Appraisal. Federal Reserve Bank of St. Louis Review. [online]. Available at: http://research.stlouisfed.org/publications/review/93/03/Gold_Mar_Apr1993.pdf
Bordo, M.D. and Eichengreen, B. (1993). A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform. National Bureau of Economic Research, USA, p. xi.
Bordo, M.D. and Schwartz, A.J. (eds.) (2009). A Retrospective on the Classical Gold Standard, 1821–1931. University of Chicago Press, Chicago.
Chorev, N. and Babb, S. (2009). The Crisis of Neoliberalism and the Future of Internationl Instiutions: A Comparison of the IMF and World Trade Organization. Springer Science and Business Media B.V.
Dominguez, K. M. (1993). The Role of International Organizations in the Bretton Woods System; in Bordo, M.D. and Eichengreen, B. (eds.) A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform. University of Chicago Press. [online]. Available at: http://www.nber.org/chapters/c6874
Duggan, M.C. (2013). “Taking Back Globalization: A China-United States Counterfactual Using Keynes’ 1941 International Clearing Union” in Review of Radical Political Economy.
Eichengreen, B. and Wyplosz, C. (1995). What Do Currency Crises Tell Us About the Future of the International Monetary System? Center for International and Development Economics Research (CIDER) Working Papers, University of California at Berkeley C95-057, University of California at Berkeley.
Foreman-Peck, J. (1995). A History of the World Economy: International Relations Since 1850. Harvester Wheatsheaf, London.
Gavin, F.J. (1996). Economic Myths Explained – The Legends of Bretton Woods. Orbis, 40(2), pp. 183–198.
Ghosh, A.R., Gulde, A.-M. and Wolf, H.C. (2002). Exchange Rate Regimes: Choices and Consequences. The MIT Press, Cambridge, MA.
Grubel, H.G. (1977). The International Monetary System, 3rd edn, Penguin, Harmondsworth.
Hall, S.G., Hondroyiannis, G., Swamy, P. and Tavlas, G.S. (2011). Bretton Woods Systems, Old and New, and the Rotation of Exchange-Rate Regimes, The Manchester School, 79(2), pp. 293–317.
Prestowitz, C. (2004). Rogue Nation: American Unilateralism and the Failure of Good Intentions. Perseus Books Group, Cambridge.
Rolnick, A.J. and Weber, W.E. (1986). Gresham’s Law or Gresham’s Fallacy. Journal of Political Economy, 94(1) pp. 185–199.
Sarno, L. and Taylor, M.P. (2002). The Economics of Exchange Rates. Cambridge University Press, Cambridge.
Tamny, J. (2013). Keynes, White, and the Battle of Bretton Woods. Available: http://www.forbes.com/sites/johntamny/2013/03/31/keynes-white-and-the-battle-of-bretton-woods/
Williamson, J. and Milner, C. (1991). The World Economy: A Textbook in International Economics. Harvester Wheatsheaf, Hemel Hempstead
World Gold Council. (2014). Monetary History: July 22nd 1944. Available: http://www.gold.org/value/reserve_asset/history/monetary_history/vol3/1944jul22.html
Author information
Authors and Affiliations
Copyright information
© 2017 The Editor(s) (if applicable) and The Author(s) 2017, corrected publication March 2018.
About this chapter
Cite this chapter
Baimbridge, M., Litsios, I., Jackson, K., Lee, U.R. (2017). International Monetary Systems in Historical Perspective. In: The Segmentation of Europe. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-59013-8_4
Download citation
DOI: https://doi.org/10.1057/978-1-137-59013-8_4
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-137-59012-1
Online ISBN: 978-1-137-59013-8
eBook Packages: Economics and FinanceEconomics and Finance (R0)