The Long Twilight of Gold: How a Pivotal Practice Persisted in the Assemblage of Money

Why has gold persisted as a significant reserve asset despite momentous changes in international monetary relations since the collapse of the classical gold standard? IPE theories have little to say about this question. Conventional accounts of international monetary relations depict a succession of discrete monetary regimes characterized by specific power structures or dominant ideas. To explain the continuous importance of gold, we draw on insights from social psychology and new materialist theories. We argue that international monetary relations should be understood as a complex assemblage of material artifacts, institutions, ideas, and practices. For much of its history, this assemblage revolved around the pivotal practice of referencing money to gold. The centrality of gold as experienced by policymakers had important effects. Using archival and other evidence, we document these effects from the 1944 Bretton Woods conference through the transition to floating exchange rates in the mid-1970s; most IPE scholars underestimate the role of gold during this period. Power relations and economic ideas were obviously important, but they contributed little to a fundamental development: the long process of reluctantly coming to terms with the limitations of specie-backed currency, and the progressive and still ongoing decentering of gold in international monetary relations.

Buildings for Dollars and Oil: East German and Romanian Construction Companies in Cold War Iraq

This article discusses the partial integration of companies from socialist Eastern Europe into the nascent economic globalisation in the late Cold War. By focusing on the industrial slaughterhouse designed and built in Baghdad by East German and Romanian companies (1974–81), it shows how they operated within and across the political economy of state socialism and the emerging, Western-dominated market of construction services. In Baghdad, East Germans and Romanians struggled with working across differing monetary regimes, inefficient corporate structures and the requirement to comply with Western standards and regulations. This article shows how they strived to bypass obstacles and to exploit opportunities stemming from their liminal and unequal position in Iraq. By zooming into architectural and engineering documentation, it argues that petrobarter agreements, or the exchange of crude oil for goods and services, shaped programmes, layouts, technologies and materialities of buildings constructed by Eastern Europeans in Iraq and the region.

Diversity of Monetary Regimes and Reactions to the Pandemic Crisis

This chapter analyses to what extent the type of monetary regime in three Balkans countries (Bulgaria, Romania, and Serbia) determines the scope and nature of reactions to the pandemic crisis in the short run (providing liquidity to different sectors) and considers the possibilities for a long-term recovery. A comparative perspective is particularly suitable for the Balkan countries with great institutional diversity of the monetary regimes. In particular, the two members of the EU, Bulgaria and Romania, have been following different principles of monetary regimes for decades (Currency Board versus discretionary Monetary Policy). Both Bulgaria and Romania follow closely the ECB monetary policy. Serbia, which is outside the EU, is not affected by the constraints of European integration and actually has its independent monetary policy (although the Euro is also an important external anchor).

On the Drivers of Inflation in Different Monetary Regimes

This document proposes a general macroeconomic framework to analyze the behavior of inflation. This approach has two characteristics. The first is the distinction of monetary regimes based on the number of shocks that have a permanent effect on the price level. When all shocks have a permanent impact, the regime determines the inflation rate, as in inflation targeting. On the other hand, when there is only one shock with permanent effects, the regime determines the price level. An example of this is a regime with a fixed exchange rate. Even if there is no explicit target for the domestic price level, this becomes determined by the operation of a regime of this type. The second characteristic comes from the factors that Granger cause the rate of inflation or the price level. With this, a new perspective on four different historical cases emerges. One is the German hyperinflation; the second is that of the United States for a very long sample. For Brazil and Mexico, the analysis demonstrates that their inflationary processes' complexity arises from the regime changes they have gone through.

The Fate of International Monetary Systems: How and Why They Fall Apart

The collapses of the interwar and Bretton Woods monetary regimes have been understood as evidence that international monetary regimes fail when sudden economic shocks destabilize the political coalitions or shared ideas underpinning them. But while these histories are important, other monetary regimes, such as the Sterling Area and Latin Union, disintegrated over long periods of time. If exogenous shocks do not account for varied patterns of destabilization, what does? Using the tools of comparative-historical analysis, I argue that these patterns are the result of strategic choices made by hegemonic powers, choices that are in turn governed by the historical-structural foundations of regimes. From these foundations emerge alternative leadership strategies and membership behaviors responsible for endogenous macro-institutional effects that drive the observed regime trajectories. Regime leaders may establish visibly unequal collective arrangements that maintain their positions but leave a system vulnerable to overt internal resistance and sudden breakdown. Or leaders may reject collective arrangements in order to secretly discriminate among members, slowly building dysfunction into a system, driving its gradual abandonment by members and institutional decline. The analysis both suggests that more equal state power may improve long-run regime performance, and also locates structural vulnerabilities in contemporary regimes.

Patterns of Foreign Exchange Intervention under Inflation Targeting

The paper documents the use of foreign exchange intervention (FXI) across countries and monetary regimes, with special attention to its use under inflation targeting (IT). We find significant differences between advanced and emerging market economies, with the former group conducting FXI limitedly and broadly symmetrically, while the use of this policy instrument in emerging market countries is pervasive and mostly asymmetric (biased towards purchasing foreign currency, even after taking into account precautionary motives). Within emerging markets, the use of FXI is common both under IT and non-IT regimes. We find no evidence of FXI being used in response to inflation developments, while there is strong evidence that FXI responds to exchange rates, indicating that IT central banks in EMDEs have dual inflation/exchange rate objectives. We also find a higher propensity to overshoot inflation targets in emerging market economies where FXI is more pervasive.