The Anatomy of an International Monetary Regime: The Classical Gold Standard, 1880-1914

by Giulio M. Gallarotti

Overview

Widely considered the crowning achievement in the history of international monetary relations, the classical gold standard (1880-1914) has long been treated like a holy relic. Its veneration, however, has done more to obscure than to reveal the actual nature of the era's monetary system. In The Anatomy of an International Monetary Regime, Giulio M. Gallarotti addresses the nature of the classical gold standard in its international context, offering the first comprehensive and systematic treatment of the subject. Three fundamental questions are essential to the discussion: How did the regime originate? How did it work? Why did it persist? Gallarotti uses an interdisciplinary approach that draws upon politics, economics, and ideology to explain the answers. He challenges traditional assumptions about the period, arguing that cooperation among nations or central banks was not a principal factor in either the origin or stability of the system, and that neither the British state nor the Bank of England were the leaders or managers of the gold standard. Rather, a decentralized process involving the status of gold, industrialization and economic development, the politics of gold, and liberal economic ideology provided converging incentives for starting and maintaining the system. Gallarotti's study presents the most comprehensive and interdisciplinary examination available of the nature of monetary relations in the four decades before World War I. His important, revisionist view will alter the way we think about a crucial period in the growth of the international monetary system. It will be essential reading for scholars and students of economic history and policy.

Product Details

ISBN-13:	9780195358230
Publisher:	Oxford University Press
Publication date:	03/16/1995
Sold by:	Barnes & Noble
Format:	eBook
File size:	3 MB

Table of Contents

1	Introduction	3
	The Organization of This Book	14
2	The Classical Gold Standard as an International Monetary Regime	16
	General Overview of the Gold Standard	18
	The Component Parts: The Institutional Character of the Gold Standard	27
	Liquidity and Reserves	27
	Adjustment	34
	Exchange Rates	42
	Capital Controls	45
	Confidence	49
	Institutional Synthesis of the Gold Standard	54
3	Cooperation under the Gold Standard	58
	Cooperation among National Governments under the Gold Standard	60
	The Conference of 1867	62
	The Conference of 1878	66
	The Conference of 1881	72
	The Conference of 1892	76
	Central Bank Cooperation under the Gold Standard	78
4	British Hegemony under the Gold Standard	86
	The Goals of the British State	88
	The Principal-Agent Link: The Bank of England as an Agent of British Hegemony	93
	Great Britain and the International Monetary Conferences of 1867, '78, '81, '92	97
5	Hegemony and the Bank of England	111
	Indirect Hegemony: The Bank of England and Central Banking in Great Britain	113
	Acknowledging Public Responsibility	114
	Managing the British Monetary System	119
	Direct Hegemony: The Bank of England as an International Central Bank	131
	Acknowledging Public Responsibility	131
	International Reserve Management and Lender of Last Resort	133
	Managing the International Monetary System	135
	Managing International Crises	139
6	The Origin of the Gold Standard	141
	The Structural Foundations of the Gold Standard	143
	The Ideology of Gold	143
	Industrialization and Economic Development	147
	The Politics of Gold	151
	The Proximate Foundations of the Gold Standard: Chain Gangs and Regime Transformation	160
	The 1860s: A Decade of Growing Nervousness	160
	The Monetary Chain Gang	165
	The 1870s	169
	The Permissive Foundations of the Gold Standard	175
7	The Stability of the Gold Standard	181
Tier 1	The Proximate Foundations of Adjustment	185
	The Stable Supersystem of International Politics	185
	The Stable Supersystem of International Economics	189
	The Gold Standard and Core Nations	193
	Synchronous Macroeconomies	200
	Stabilizing Expectations	204
Tier 2	The Normative Foundations of Adjustment	207
8	The Gold Standard and Regime Theory	218
	Hegemonic Regimes	219
	Cooperative Regimes	224
	Diffuse Regimes	227
	Statistical Appendix	237
	Data	237
	Discount Rates of Central Banks	237
	World Price Indices	237
	British Series	237
	Estimation Techniques	238
	Equations	241
	Granger Causality Tests	262
	Central Bank Discount Rates	263
	World Price Indices and British Series	263
	Bank of England Discount Rate and British Series	264
	Bank of England Reserves and British Series	265
	Figures A.1-A.8	266
	Notes	271
	References	325
	Index	341