Monetary Regimes and Policy on a Global Scale
Hugh Rockoff2015, Current Federal Reserve Policy Under the Lens of Economic History
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Abstract
Michael D. Bordo has helped to define the modern field of monetary history, drawing from it important policy lessons for current practitioners. For his seventieth year, we survey his contributions to our understanding of the Great Depression, money and the economy in historical perspective, exchange rate regimes including the gold standard, Bretton Woods, and the European Monetary Union, globalization, financial crises, the Canadian monetary experience, and historical guidance for monetary policy.
Key takeaways
- Both Eichengreen (1992) and Temin (1989) contend that the monetary authorities could not have engaged in expansionary monetary policy because they had to maintain an adequate gold cover to remain on the gold standard.
- For the gold standard, when Bordo says that the gold standard made a good deal of sense in its day but is no longer appropriate, policymakers should pay close attention.
- Bordo and Lars Jonung (2003) and more recently Bordo and James (2008 have drawn on the history of monetary regimes and monetary unions to consider the future of the EMU.
- However, banking regulation is an important complement to stable monetary policy.
- Inevitably, history teaches us, as Bordo has thoroughly demonstrated, that changes in monetary policies and reforms of monetary institutions produce a wide range of effects that must be carefully measured and weighed to assay the tradeoffs before final choices are made.
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2010-1 The Monetary Economy and the Economic Crisis
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