by Kenneth Rogoff · 27 Feb 2025 · 330pp · 127,791 words
just how remarkable it is that the euro is around at all. Merging the currencies of myriad complex developed economies with open capital markets and floating exchange rates, without causing a blowup, was extraordinary, perhaps akin to docking several high-speed orbiting spacecraft at the same time; one slight misstep and there will
…
of holding back financial market development, much as in modern-day China. Canada’s experiment with floating from 1950 to 1962 had shown that a floating exchange rate was a viable option, although most countries preferred to live with their dollar pegs.4 Not everyone agreed that fixed rates were such a good
…
idea. In a classic 1953 paper, Milton Friedman—once again the skeptic—argued that a regime of floating exchange rates, set by the market, would ultimately prove far more stable than a shaky system of fixed exchange rates set by politicians and technocrats.5 It
…
sprint in the 1970s. U.S. inflation wreaked havoc worldwide. One prediction of Friedman’s that proved way off the mark was his claim that floating exchange rates would move smoothly and steadily in response to inflation and interest rate differentials. Instead, floating rates proved wildly volatile. In 1976, Rudiger Dornbusch produced an
…
has been supplanted by more-sophisticated models, the original overshooting model is still regarded as yielding fundamental insights into the connection between monetary policy and floating exchange rates. To be fair, the rapid evolution of international capital markets also contributed to exchange rate volatility. The development of lightly regulated offshore dollar markets in
by Quinn Slobodian · 16 Mar 2018 · 451pp · 142,662 words
Architects of International Finance: The Bretton Woods Era (London: Routledge, 2005), 162–173. On the role of the Bellagio Group in advocating the shift to floating exchange rates, see Carol Connell, Reforming the World Monetary System: Fritz Machlup and the Bellagio Group (London: Pickering and Chatto, 2013); Matthias Schmelzer, Freiheit für Wechselkurse und
…
: A Constructive Response,” The World Economy 1, no. 3 (1978): 257. 124. On the campaigns of Haberler, Fritz Machlup, Milton Friedman, and other economists for floating exchange rates, see Carol Connell, Reforming the World Monetary System: Fritz Machlup and the Bellagio Group (London: Pickering and Chatto, 2013); Robert Leeson, The Eclipse of Keynesianism
…
, 197 Haberler, Gottfried, 8, 99, 147, 164, 190, 207; and business cycle research, 17, 21, 31, 49, 71; on European integration, 183, 194, 216; on floating exchange rates, 241; Haberler Method, 72–73, 75, 77, 127; Haberler Report, 183, 191, 198, 200–202, 215, 222, 285; interwar international collaboration, 30, 57, 71–77
by Ashoka Mody · 7 May 2018
would change continuously as national and global conditions changed. introduction 5 German officials opposed a monetary union. Germans, traditionally more pro-market, were inclined toward floating exchange rates. But the French initiative to create a single European currency was pulling them in the opposite direction. From the start, the political worry for Germans
…
Federal Reserve Bank of Richmond, would later explain: “Germany’s commitment to a free market economy pushed it to reject fixed exchange rates and adopt floating exchange rates.”82 Thus, in proposing a monetary union, Pompidou was defying not only the global experience that was causing fixed-exchange-rate systems to break down
…
a path toward a common European monetary policy. The Germans could have said no and walked away. Germany was an economically powerful nation. It preferred floating exchange rates. The idea of a European monetary union would have been shelved in the archives. The Shadow of the War Continues to Fall on Germany Germany
…
moved toward the French ideological position on exchange rates. Although German scholars remained much more interested in floating rates than their French counterparts, references to floating exchange rates in German writings began to fall (see figure 1.2). Protected by the stability ideology, a process of seemingly easy compromises began. In April 1972
…
the next chapter. The final economic argument, which also appeared only much later, was based on the briefly popular “two poles” view.197 By then, floating exchange rates had become the global norm. But Stanley Fischer, then the IMF’s first deputy managing director, also proposed that truly fixed exchange rates (as within
…
within the European snake in the tunnel, and now under the ERM, fixed rates had generated crises without providing any benefits. Moreover, the worry that floating-exchange-rate systems would be prone to “competitive devaluations,” with countries matching the devaluations undertaken by competitor countries, had definitely faded. Was it time, maybe, to give
by Philip Coggan · 1 Jul 2009 · 253pp · 79,214 words
dollars. If the dollar fell against the Deutschmark, that would be bad news. So companies looked for ways to protect themselves from these risks. Secondly, floating exchange rates created the potential for continuous speculation. The 1970s saw the creation of the financial futures market in Chicago, which allowed traders to bet on the
…
. They could make money speculating on the markets and they could make money helping companies protect themselves from foreign-exchange risk. Both opportunities were taken. Floating exchange rates also had significant implications for governments. Think of three key elements of monetary policy: exchange rates, interest rates and capital controls. Under the Bretton Woods
…
kind of economy, in which periods of rapid expansion were suddenly cut short as governments raised interest rates to protect sterling. In a world of floating exchange rates, there is no requirement for governments to ratchet up interest rates every time the currency falls. Voters naturally don’t like high interest rates. The
…
was designed to be cheaper for investors. However, Chicago, the world’s biggest futures market, retains the pits and coloured jackets. With the advent of floating exchange rates (see Chapter 14), it occurred to Chicago traders that there may well be a market for trading in currency futures, since exchange rates seemed to
…
, or euro. European governments struggled for a long time with the breakup of the Bretton Woods system. By nature, they were less inclined to embrace floating exchange rates than the more laissez-faire economies of the UK and the US and the subsequent twenty-five years saw a series of attempts to restrict
…
the single currency, interest rates would be set at the European Central Bank’s headquarters in Frankfurt. EMERGING MARKET CURRENCIES The problems of dealing with floating exchange rates have not been confined to the countries of Europe. The so-called emerging markets, the developing nations of Asia, Latin America and eastern Europe, have
…
EXCHANGE RATES Currencies with set values against each other which vary only in times of crisis when one or more currencies will revalue or devalue FLOATING EXCHANGE RATES Currencies whose values against each other are set by market forces FORFAITING Raising money by selling a company’s invoices FORWARD/FORWARD AGREEMENT Arrangement to
by Nigel Dodd · 14 May 2014 · 700pp · 201,953 words
was in turn “pegged” to gold. After a series of difficulties during the 1960s, the system finally broke down in 1973, when a system of “floating” exchange rates was adopted. President Nixon’s decision to suspend the dollar’s convertibility into gold in 1971—known as the “Nixon shock”—was a major step
…
defended. It is on this level, moreover, that capitalist crises take on an international dimension through money. After the collapse of Bretton Woods, states with floating exchange rates were competing to determine which of them bear the brunt of devaluation. Alternatively, in the aftermath of the 2007–8 banking crisis, periodic “currency wars
…
collapse of the Bretton Woods regime, which saw major struggles between capital and labor being waged against the background of a new international regime of floating exchange rates, and the ongoing crisis within the Eurozone, whose devastating effect across classes and generations is still being played out. One of the classic analyses of
…
Union, which used gold to settle its accounts with the outside world. But the most pressing concern for states focused on the new regime of floating exchange rates. The inconvertible dollar became the basis for a new international regime of discipline in which monetary governance was intensely politicized. On one level, this was
…
refusing to lend, the city authorities turned to the city unions and their accumulated pension funds to finance their own bonds. In the era of floating exchange rates, entire nation-states were set to assume the status of New York on the international stage, subjecting their citizens to a downward spiral of devaluation
…
a flexible exchange rate regime that has compelled those states most seriously in deficit to embark on socially corrosive austerity programs. In a regime of floating exchange rates, economic imbalances can be redressed via exchange rates (i.e., a weaker currency should make exported goods cheaper abroad). In the Eurozone, no such option
…
. For Strange, casino capitalism had its roots in attempts to manage risk, which unwittingly increased it. These were the monetary risks associated with globalization and floating exchange rates: of doing business in different currencies, for example, and in different regions of the world with various economic and monetary conditions. Modern financial derivatives, for
by Benn Steil · 14 May 2013 · 710pp · 164,527 words
flow of international gold-credit, and I would deliberately utilise fluctuations in the exchange as the shock-absorber.” Though this might appear a defense of floating exchange rates, he would far more often than not in his career defend the desirability of “stable” rates. This continuous finessing of so fundamental an issue in
…
replacing the dollar globally today. Even a thinker as radical and creative as Keynes never made a total break with it. The extreme of purely floating exchange rates, such as the world has known since 1971, was considered by few economists in the ’30s (Lionel Robbins being a notable exception) to be a
…
“system” as such, helping to restore equilibrium. Today associated with laissez-faire economics, floating exchange rates were then frowned upon by economists of the right as well as the left as both symptom and cause of disorder in monetary affairs; disorder
…
that other countries will be enabled to pursue monetary credit and trade policies that we regard as essential for a high level of world trade.” Floating exchange rates during White’s time at the Treasury were anathema to powerful U.S. commercial interests—large exporters and domestic producers—owing to upward pressure on
…
governments in endless negotiations. Not all prominent economists who shared Friedman’s moral and economic commitment to free enterprise, however, shared his sanguine view of floating exchange rates. Friedrich Hayek, who won the Nobel Prize in 1974, two years prior to Friedman, had argued as far back as 1937 that floating rates would
…
, Rubin’s hailing of the Chinese currency peg in 1998, and Geithner’s condemnation of it in 2009: whether the United States supports fixed or floating exchange rates at any given point in time is determined by which will give it a more competitive dollar. Whereas such elasticity of principle can be rationalized
…
–53. Drafted the original Lend-Lease bill. Friedman, Milton (1912–2006). American economist. A renowned monetarist, he was also an early and articulate supporter of floating exchange rates. Awarded the Nobel Prize in Economic Sciences in 1976. Funk, Walther (1890–1960). German economist and government official. Reich minister of economics, 1937–45; president
…
(1974:129). 25. Witteveen (Jan. 15, 1974). 26. Friedman (Nov. 14, 1963). 27. Hayek (1937 [1989]:64). 28. The Hayek-Friedman split on fixed versus floating exchange rates largely reprised that between two influential League of Nations economists in the 1930s, Ragnar Nurske and Gottfried Haberler. See James (1996:38, 89). 29. Zhou
by Elroy Dimson, Paul Marsh and Mike Staunton · 3 Feb 2002 · 353pp · 148,895 words
dollar in 1971, the Bretton Woods System collapsed. After some last-ditch attempts to set new fixed rates, the world turned in 1973 to the floating exchange rate system that persists to the present day. There were thus four exchange rate regimes over the twentieth century. During 1900–14 the gold standard was
…
–45 contained the two world wars. The Bretton Woods fixed-rate system then operated from 1946–71. Finally, the period since has been one of floating exchange rates. Currencies went through an adjustment to the Bretton Woods system until 1949. It is therefore helpful to start by dividing our period into two: 1900
…
exchange rates appreciate or depreciate annually by no more than a fraction of one percentage point. 7.5 Volatility of exchange rates At the time floating exchange rates were adopted in 1973, it was asserted that exchange rates would become free to adjust to international differences in inflation. Countries with price levels that
…
War, 37, 44, 47, 69, 75, 76, 93, 94, 116, 122, 123, 153 Fisher, I., 38, 69, 70 Fisher, L., 38 Fisher effect, 69–70 Floating exchange rates, 94, 98 Foreign bonds, 16–7 Foidl, N., 254 France, 249–53 see also cross-country comparisons Frankfurt, 19 Fraser, P., 188 Free float, 13
by James Rickards · 10 Nov 2011 · 381pp · 101,559 words
or the markets desired. One currency era had ended and another had now begun, but the currency war was far from over. The age of floating exchange rates, beginning in 1973, combined with the demise of the dollar link to gold put a temporary end to the devaluation dramas that had occupied international
…
exchange crises by providing finance conditioned upon austerity measures designed to protect foreign bankers and bondholders. Yet with the elimination of gold, the rise of floating exchange rates and the piling up of huge surpluses by developing countries, the IMF entered the twenty-first century with no discernable mission. Suddenly the G20 breathed
…
Commission financial economics financial war game financial warfare strategy First National Bank of New York First National City Bank of New York fixed exchange rates floating exchange rates, 1970s Fort Knox, Kentucky Foundations of Economic Analysis (Samuelson) fractal dimension framing, in economics France currency collapse in 1920s and European sovereign debt crisis of
by Vijay Joshi · 21 Feb 2017
rupee would be good for damping down inflation. Perhaps he was persuaded by the reports of some government committees that had advocated moving towards a floating exchange rate. He turned away from Reddy’s strategy of managing the rupee and allowed the exchange rate to be market-determined. In 12 months from April
by Otmar Issing · 20 Oct 2008 · 276pp · 82,603 words
macro level concerns the choice of exchange rate regime. This can best be illustrated by looking at the two extremes of a fixed and a floating exchange rate respectively. If a country fixes, or pegs, the exchange rate of its currency to that of another country, this has serious consequences for monetary policy
by Paul Volcker and Christine Harper · 30 Oct 2018 · 363pp · 98,024 words
by Kindleberger, Charles P. and Robert Z., Aliber · 9 Aug 2011
by Doug Henwood · 30 Aug 1998 · 586pp · 159,901 words
by Tamim Bayoumi · 405pp · 109,114 words
by Mervyn King · 3 Mar 2016 · 464pp · 139,088 words
by Milton Friedman · 1 Jan 1962 · 275pp · 77,955 words
by Lasse Heje Pedersen · 12 Apr 2015 · 504pp · 139,137 words
by Leo Panitch and Sam Gindin · 8 Oct 2012 · 823pp · 206,070 words
by R. Christopher Whalen · 7 Dec 2010 · 488pp · 144,145 words
by Milton Friedman · 1 Jan 1992 · 275pp · 82,640 words
by Paul Krugman · 18 Feb 2010 · 162pp · 51,473 words
by Jeff Madrick · 11 Jun 2012 · 840pp · 202,245 words
by Bernard Lietaer · 28 Apr 2013
by Binyamin Appelbaum · 4 Sep 2019 · 614pp · 174,226 words
by Larry Harris · 2 Jan 2003 · 1,164pp · 309,327 words
by Peter Hennessy · 27 Aug 2019 · 891pp · 220,950 words
by Philip Coggan · 1 Dec 2011 · 376pp · 109,092 words
by Mitch Feierstein · 2 Feb 2012 · 393pp · 115,263 words
by Kwasi Kwarteng · 12 May 2014 · 632pp · 159,454 words
by Martin Wolf · 24 Nov 2015 · 524pp · 143,993 words
by Philip Coggan · 6 Feb 2020 · 524pp · 155,947 words
by Paul Kennedy · 15 Jan 1989 · 1,477pp · 311,310 words
by Michel Aglietta · 23 Oct 2018 · 665pp · 146,542 words
by George Gilder · 16 Jul 2018 · 332pp · 93,672 words
by Niall Ferguson · 13 Nov 2007 · 471pp · 124,585 words
by Stephen D. King · 22 May 2017 · 354pp · 92,470 words
by James Rickards · 15 Nov 2016 · 354pp · 105,322 words
by Giovanni Arrighi · 15 Mar 2010 · 7,371pp · 186,208 words
by John Darwin · 23 Sep 2009
by Andy Kessler · 13 Jun 2005 · 218pp · 63,471 words
by George Magnus · 10 Sep 2018 · 371pp · 98,534 words
by Russell Napier · 18 Jan 2016 · 358pp · 119,272 words
by Markus K. Brunnermeier, Harold James and Jean-Pierre Landau · 3 Aug 2016 · 586pp · 160,321 words
by Paul Tucker · 21 Apr 2018 · 920pp · 233,102 words
by Stephanie Kelton · 8 Jun 2020 · 338pp · 104,684 words
by Adam Tooze · 13 Nov 2014 · 1,057pp · 239,915 words
by Nicholas Wapshott · 2 Aug 2021 · 453pp · 122,586 words
by Nouriel Roubini · 17 Oct 2022 · 328pp · 96,678 words
by Andrew Marr · 2 Jul 2009 · 872pp · 259,208 words
by William Baker and Addison Wiggin · 2 Nov 2009 · 444pp · 151,136 words
by Paul Ely Beckerman and Andrés Solimano · 30 Apr 2002
by Charles Wheelan · 18 Apr 2010 · 386pp · 122,595 words
by Dani Rodrik · 23 Dec 2010 · 356pp · 103,944 words
by Faisal Islam · 28 Aug 2013 · 475pp · 155,554 words
by David Hale and Lyric Hughes Hale · 23 May 2011 · 397pp · 112,034 words
by Saifedean Ammous · 23 Mar 2018 · 571pp · 106,255 words
by Judith Stein · 30 Apr 2010 · 497pp · 143,175 words
by Kees Van der Pijl · 2 Jun 2014 · 572pp · 134,335 words
by Katrina Vanden Heuvel and William Greider · 9 Jan 2009 · 278pp · 82,069 words
by Adam Tooze · 15 Nov 2021 · 561pp · 138,158 words
by Lanny Ebenstein · 23 Jan 2007 · 298pp · 95,668 words
by Anatole Kaletsky · 22 Jun 2010 · 484pp · 136,735 words
by David Wolman · 14 Feb 2012 · 275pp · 77,017 words
by Mark Blyth · 24 Apr 2013 · 576pp · 105,655 words
by David Birch · 14 Jun 2017 · 275pp · 84,980 words
by Will Hutton · 30 Sep 2010 · 543pp · 147,357 words
by Josh Ryan-Collins, Tony Greenham, Richard Werner and Andrew Jackson · 14 Apr 2012
by Niall Kishtainy · 15 Jan 2017 · 272pp · 83,798 words
by Russell Jones · 15 Jan 2023 · 463pp · 140,499 words
by Janek Wasserman · 23 Sep 2019 · 470pp · 130,269 words
by Mehrsa Baradaran · 7 May 2024 · 470pp · 158,007 words
by Eswar S. Prasad · 27 Sep 2021 · 661pp · 185,701 words
by George Gilder · 30 Apr 1981 · 590pp · 153,208 words
by Greg Ip · 12 Oct 2015 · 309pp · 95,495 words
by James Rickards · 7 Apr 2014 · 466pp · 127,728 words
by Marc Levinson · 31 Jul 2016 · 409pp · 118,448 words
by Edward Fishman · 25 Feb 2025 · 884pp · 221,861 words
by Kariappa Bheemaiah · 26 Feb 2017 · 492pp · 118,882 words
by Russell Napier · 19 Jul 2021 · 511pp · 151,359 words
by Peter L. Bernstein · 1 Jan 2000 · 497pp · 153,755 words
by Meghnad Desai and Yahia Said · 12 Nov 2003
by David G. W. Birch · 14 Apr 2020 · 247pp · 60,543 words
by Paul Mason · 30 Sep 2013 · 357pp · 99,684 words
by Ian Kershaw · 29 Aug 2018 · 736pp · 233,366 words
by Charles Eisenstein · 11 Jul 2011 · 448pp · 142,946 words
by Andrew Jackson (economist) and Ben Dyson (economist) · 15 Nov 2012 · 363pp · 107,817 words
by Raghuram Rajan · 24 May 2010 · 358pp · 106,729 words
by Peter Temin · 17 Mar 2017 · 273pp · 87,159 words
by Michael Kenny and Nick Pearce · 5 Jun 2018 · 215pp · 64,460 words
by William Keegan · 24 Jan 2019 · 309pp · 85,584 words
by Stephen D. King · 17 Jun 2013 · 324pp · 90,253 words
by Dani Rodrik · 8 Oct 2017 · 322pp · 87,181 words
by Ken Auletta · 28 Sep 2015 · 349pp · 104,796 words
by Rob Kitchin,Tracey P. Lauriault,Gavin McArdle · 2 Aug 2017
by Meghnad Desai · 15 Feb 2015 · 270pp · 73,485 words
by Kimberly Clausing · 4 Mar 2019 · 555pp · 80,635 words
by Irene Yuan Sun · 16 Oct 2017 · 239pp · 62,311 words
by Milton Friedman · 1 Feb 1993 · 25pp · 7,179 words
by Philip Coggan · 1 Jul 2025 · 96pp · 36,083 words
by Colin Read · 16 Jul 2012 · 206pp · 70,924 words
by Bench Ansfield · 15 Aug 2025 · 366pp · 138,787 words
by Justin Fox · 29 May 2009 · 461pp · 128,421 words
by Stewart Lansley · 19 Jan 2012 · 223pp · 10,010 words
by Manuel Castells · 31 Aug 1996 · 843pp · 223,858 words
by Harold James · 15 Jan 2023 · 469pp · 137,880 words
by Dani Rodrik · 12 Oct 2015 · 226pp · 59,080 words
by Richard Haass · 10 Jan 2017 · 286pp · 82,970 words
by Noam Chomsky · 9 Jul 2015