Money is a core feature in all discussions of economic crisis, as is clear from the debates about the responses of the European Central Bank and the Federal Reserve Bank of the United States to the 2008 economic crisis. This volume explores the role of money in economic performance, and focuses on how monetary systems have affected economic crises for the last 4,000 years. Recent events have confirmed that money is only a useful tool in economic exchange if it is trusted, and this is a concept that this text explores in depth. The international panel of experts assembled here offers a long-range perspective, from ancient Assyria to modern societies in Europe, China and the US. This book will be of interest to students and researchers of economic history, and to anyone who seeks to understand the economic crises of recent decades, and place them in a wider historical context.

This new collection revolves around Krugman's work on international monetary economics from the late 1970s to the present in an effort to make sense of a turbulent period that "involved one surprise after another, most of them unpleasant." Paul Krugman's first collection of essays, Rethinking International Trade, mounted a spirited assault on established trade theory and proposed an alternative approach to account for increasing returns and imperfect competition. Less theoretical and more embedded in real-world experience, this new collection revolves around Krugman's work on international monetary economics from the late 1970s to the present in an effort to make sense of a turbulent period that "involved one surprise after another, most of them unpleasant." The eleven essays cover such key areas as the role of exchange rates in balance-of-payments adjustment policy, the role of speculation in the functioning of exchange rate regimes, Third World debt, and the construction of an international monetary system. They are unified by the same basic methodology and style the construction of a small theoretical model in order to simplify or clarify a puzzling or difficult world monetary problem.

In 1971, President Nixon imposed national price controls and took the United States off the gold standard, an extreme measure intended to end an ongoing currency war that had destroyed faith in the U.S. dollar. Today we are engaged in a new currency war, and this time the consequences will be far worse than those that confronted Nixon. Currency wars are one of the most destructive and feared outcomes in international economics. At best, they offer the sorry spectacle of countries' stealing growth from their trading partners. At worst, they degenerate into sequential bouts of inflation, recession, retaliation, and sometimes actual violence. Left unchecked, the next currency war could lead to a crisis worse than the panic of 2008. Currency wars have happened before-twice in the last century alone-and they always end badly. Time and again, paper currencies have collapsed, assets have been frozen, gold has been confiscated, and capital controls have been imposed. And the next crash is overdue. Recent headlines about the debasement of the dollar, bailouts in Greece and Ireland, and Chinese currency manipulation are all indicators of the growing conflict. As James Rickards argues in Currency Wars, this is more than just a concern for economists and investors. The United States is facing serious threats to its national security, from clandestine gold purchases by China to the hidden agendas of sovereign wealth funds. Greater than any single threat is the very real danger of the collapse of the dollar itself. Baffling to many observers is the rank failure of economists to foresee or prevent the economic catastrophes of recent years. Not only have their theories failed to prevent calamity, they are making the currency wars worse. The U. S. Federal Reserve has engaged in the greatest gamble in the history of finance, a sustained effort to stimulate the economy by printing money on a trillion-dollar scale. Its solutions present hidden new dangers while resolving none of the current dilemmas. While the outcome of the new currency war is not yet certain, some version of the worst-case scenario is almost inevitable if U.S. and world economic leaders fail to learn from the mistakes of their predecessors. Rickards untangles the web of failed paradigms, wishful thinking, and arrogance driving current public policy and points the way toward a more informed and effective course of action.

Money is a core feature in all discussions of economic crisis, as is clear from the debates about the responses of the European Central Bank and the Federal Reserve Bank of the United States to the 2008 economic crisis. This volume explores the role of money in economic performance, and focuses on how monetary systems have affected economic crises for the last 4,000 years. Recent events have confirmed that money is only a useful tool in economic exchange if it is trusted, and this is a concept that this text explores in depth. The international panel of experts assembled here offers a long-range perspective, from ancient Assyria to modern societies in Europe, China and the US. This book will be of interest to students and researchers of economic history, and to anyone who seeks to understand the economic crises of recent decades, and place them in a wider historical context.

This book analyses how financial elites in key dollar-holding emerging markets perceive the contest between the euro and the dollar for global currency status. It also assesses how far the Eurozone has gone in challenging US hegemony in monetary affairs through the prism of these elites. Drawing on Chartalist and Constructivist theories of money, the author provides a systematic approach to studying global currency dynamics and presents extensive original empirical data on financial elites in China, Saudi Arabia, the UAE and Brazil. The author demonstrates, amongst other things, how the gradual ascendance of a structurally flawed currency like the euro has highlighted the weaknesses of the dollar ad how the euro has demonstrated that sovereignty sharing in monetary affairs is possible and that the international monetary system can be a multicurrency and multilateral system. In this highly innovative and important book, Otero-Iglesias shows the importance of studying financial elites in Brazil, China and the GCC countries in order to understand the full impact, material and ideational, of the euro in the transformation of the IMS. It will be vital reading for students and scholars of International Political Economy, International Economics, International Finance, Economic History, Economic Sociology, International Relations, Comparative Political Economy and Comparative Politics.

In the 1990s, currency crises in Europe, Mexico, and Asia have drawn worldwide attention to speculative attacks on government-controlled exchange rates and have prompted researchers to undertake new theoretical and empirical analysis of these events. This paper provides some perspective on this work and relates it to earlier research. It derives the optimal commitment to a fixed exchange rate and proposes a common framework for analyzing currency crises. This framework stresses the important role of speculators and recognizes that the government’s commitment to a fixed exchange rate is constrained by other policy goals. The final section finds that some crises may be particularly difficult to predict using currently popular methods.