Global Finance Reborn explores the history and economics of the Bretton Woods system, a post-World War II international monetary system designed to foster global prosperity. This book examines the rise and fall of this pivotal system, which ultimately unraveled in 1973, leading to an era of floating exchange rates and financial instability. It addresses fundamental questions about the tensions between national interests and global economic integration, and the United States' role in managing the international monetary system. Understanding Bretton Woods is essential for grasping today's globalized economy, including currency wars and trade imbalances. This book delves into the intellectual origins and design of Bretton Woods and its operational dynamics.
A key focus is the “Triffin Dilemma,” the inherent conflict between the U.S.'s need to supply dollars as a reserve currency and maintaining a sound balance of payments. The book meticulously traces how tensions escalated in the 1960s due to U.S. fiscal policy, inflation, and speculative attacks on the dollar. It demonstrates that the Bretton Woods system reflected specific political and economic ideologies, particularly avoiding the protectionism and competitive devaluations that plagued the interwar period.
The book progresses by first providing historical context, then analyzing the intellectual foundations and operational dynamics. It meticulously analyzes the events leading to the collapse of the system in the early 1970s, including the Nixon Shock of 1971, and finally assesses the long-term legacies of Bretton Woods, exploring its impact on the evolution of the international monetary system and the rise of financial globalization.
