In This Review

Globalizing Capital: A History of the International Monetary System

Globalizing Capital: A History of the International Monetary System
By Barry Eichengreen
232 pp, Princeton University Press, 1996

The outgrowth of a series of lectures in Belgium, this book by a prominent economic historian is a succinct and well-written history of the international monetary system -- the general framework in which financial transactions among residents of different countries take place -- and its evolution. It provides an authoritative if brief account of the pre-1914 gold standard as it functioned in the international arena; the interwar gold exchange standard that collapsed so disastrously in 1931-33; the post-1945 system agreed on at Bretton Woods, explicitly designed to avoid the weaknesses of the two preceding regimes, which had grown without overall design from a series of practices and conventions; and the period since 1973 of floating exchange rates among major currencies, along with various partially successful European efforts through 1992 to provide a zone of stability among European currencies. This last discussion, in particular, provides useful historical background for understanding current European efforts to create a monetary union, a major preoccupation in Europe before union's scheduled inauguration in January 1999.