Global Currencies

Modern economic history has been punctuated with trade deficits and currency fluctuations, to which states reacted with international agreements and eventually currency unions. The most famous case was the Gold Standard, an informal agreement between Western nation-states that pegged national currencies to gold during the late 19th and early 20th centuries. The system collapsed in the interwar period, and in 1944 was substituted with a more flexible regime based on the US dollar, the Bretton Woods System, which lasted until 1971. Exchange rates became completely flexible, while European countries started the process of monetary integration. The general public slowly forgot about currency exchange rates and balance of payments problems. However, the European debt crisis and more recently the outbreak of the war in Ukraine, have dramatically reminded us of the importance of international payments (trade deficit, currency controls, inflation).

The course intends to offer an overview of international financial systems from the rise of the Gold Standard to the European Monetary Union. The first part of the course will address the theory and methodology of international monetary history and will apply it to the case of the Gold Standard (origins, functioning mechanism, social consequences, crisis, and collapse). The second part of the course will focus on Bretton Woods and on the regime of capital control it enforced. The last part of the course will consider the international monetary system after Bretton Woods and the rise of the European Monetary Union. In the second and third parts, students’ presentations will complement the reading list.