Barry Eichengreen

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Barry Eichengreen (born 1952) is an American economist who holds the title of George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California, Berkeley, where he has taught since 1987.

He has done research and published widely on the history and current operation of the international monetary and financial system. He received his Ph.D from Yale University in 1979. He was a senior policy advisor to the International Monetary Fund in 1997 and 1998, although he has since been critical of the IMF.

His best known work is the book Golden Fetters: The Gold Standard and the Great Depression, 1919-1939, Oxford University Press, 1992. In his own book on the Great Depression, Ben Bernanke summarized Eichengreen's thesis as follows

the proximate cause of the world depression was a structurally flawed and poorly managed international gold standard

For a variety of reasons, including among others a desire of the Federal Reserve to curb the US stock market boom, monetary policy in several major countries turned contractionary in the late 1920's - a contraction that was transmitted worldwide by the gold standard. What was initially a mild deflationary process began to snowball when the banking and currency crises of 1931 instigated an international "scramble for gold". Sterilization of gold inflows by surplus countries [the USA and France], substitution of gold for foreign exchange reserves, and runs on commercial banks all led to increases in the gold backing of money, and consequently to sharp unintended declines in national money supplies. Monetary contractions in turn were strongly associated with falling prices, output and employment. Effective international cooperation could in principle have permitted a worldwide monetary expansion despite gold standard constraints, but disputes over World War I reparations and war debts, and the insularity and inexperience of the Federal Reserve, among other factors, prevented this outcome. As a result, individual countries were able to escape the deflationary vortex only by unilaterally abandoning the gold standard and re-establishing domestic monetary stability, a process that dragged on in a halting and uncoordinated manner until France and the other Gold Bloc countries finally left gold in 1936.

The main evidence Eichengreen adduces in support of this view is the fact that countries that abandoned the gold standard earlier saw their economies recover more quickly.

In 2006 he published a new book, Global Imbalances and the Lessons of Bretton Woods, MIT Press, September 2006

His most recent book is The European Economy Since 1945: Co-ordinated Capitalism and Beyond, Princeton University Press, 2007