The Rise and Fall of Trade and Monetary Legal Orders: From the Interwar Period to Today’s Global Imbalances

Abstract

This book chapter compares the International Monetary and Trade Legal Orders during the inter-war period and the post-cold war period. During the period between the two world wars, the protectionist legacy of the World War I in the form of trade and financial restrictions persisted. National policymakers, several international conferences and the League of Nations failed to prevent the world economy’s monetary disintegration. Multilateral coordination of monetary and exchange rate policy unraveled. This book chapter compares the monetary orders in the interwar period and today, and examines the risk that the current monetary system will suffer a similar fate to multilateral attempts at coordinating macroeconomic policy and crisis resolution triggered by global imbalances as during the interwar period.