Putting the 'System' in the International Monetary System

26 Pages Posted: 11 May 2013

See all articles by Michael D. Bordo

Michael D. Bordo

Rutgers University, New Brunswick - Department of Economics; National Bureau of Economic Research (NBER)

Angela Redish

University of British Columbia (UBC)

Date Written: May 2013

Abstract

The international gold standard of the late nineteenth century has been described as a system of 'spontaneous order', capturing the idea that its architects at the time were fashioning domestic monetary systems which created a system of fixed exchange rates almost as a by-product. In contrast the framers of the Bretton Woods System were intentional in building an international monetary system and so it is by advocates of designing an international monetary order. In this paper we examine the transition from spontaneous order circa 1850 to designed system and then back towards spontaneous order in the late twentieth century, arguing that it is an evolution with multiple stops and starts, and that the threads that underlie the general tendency through these hesitations are the interplay between monetary and fiscal factors and the evolution of the financial system. This transformation is embedded within deep evolving political fundamentals including the rise of democracy, nationalism, fascism and communism and two world wars.

Suggested Citation

Bordo, Michael D. and Redish, Angela, Putting the 'System' in the International Monetary System (May 2013). NBER Working Paper No. w19026. Available at SSRN: https://ssrn.com/abstract=2263610

Michael D. Bordo (Contact Author)

Rutgers University, New Brunswick - Department of Economics ( email )

New Brunswick, NJ
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Angela Redish

University of British Columbia (UBC) ( email )

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