Barry Eichengreen's research while affiliated with University of California, Berkeley and other places
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Publications (562)
Notwithstanding announcements of progress, “international original sin” (the denomination of external debt in foreign currency) remains a persistent phenomenon in emerging markets. Although some middle-income countries have succeeded in developing markets in local-currency sovereign debt and attracting foreign investors, they continue to hedge thei...
Public debts have exploded to levels unprecedented in recent history as governments responded to the COVID-19 pandemic. These rising levels of debt prompted apocalyptic warnings about the dangers of heavy debts—about the drag they will place on economic growth and the burden they impose on future generations. This book adds the other side of the eq...
The Global Financial Crisis and the COVID-19 pandemic bequeathed large increases in public debt. At some point governments may seek to bring down these elevated debt-to-GDP ratios, including by inflating (by raising nominal GDP). We assemble a panel of debt consolidation episodes spanning 220 years and 183 nations. The evidence confirms that modera...
We review arguments for CBDC issuance in India. These include facilitating payments, enhancing financial inclusion, enabling the central bank and government to retain control of the payments system, facilitating cross-border transactions, reducing dependence on the dollar-dominated global payments system, and providing an encompassing platform for...
We document a decline in the dollar share of international reserves since 1999. This decline reflects active portfolio diversification by central bank reserve managers, rather than changes in exchange rates and interest rates, reserve accumulation by a handful of central banks with distinctive balance sheets, or changes in coverage of surveys of re...
Using newly assembled data on foreign exchange market intervention, we construct a daily index of exchange market pressure during the 1992–3 crisis in the European Monetary System, allowing us to pinpoint when and where the crisis was most severe. Our analysis focuses on a neglected factor in the crisis: the role of the weak dollar in intra-EMS ten...
We ask whether epidemic exposure leads to a shift in financial technology usage and who participates in this shift. We exploit a data set combining Gallup World Polls and Global Findex surveys for some 250,000 individuals in 140 countries, merging them with information on the incidence of epidemics and local 3G Internet infrastructure. Epidemic exp...
In these highly uncertain times, flexibility has value.
Stablecoins and central bank digital currencies are on the horizon in Asia, and in some cases have already arrived. This paper provides new analysis and a critique of the use case for both forms of digital currency. It provides time-varying estimates of devaluation risk for the leading stablecoin, Tether, using data from the futures market. It desc...
On November 3, 2021, the Federal Open Market Committee announced that it would reduce the scale of its asset purchases by $15 billion a month starting immediately. Do emerging markets, such as India, need to prepare for a replay of the taper tantrum of 2013? We show that emerging markets, including India, have strengthened their external economic a...
Stablecoins and central bank digital currencies are on the horizon in Asia, and in some cases have already arrived. This paper provides new analysis and a critique of the use case for both forms of digital currency. It provides time-varying estimates of devaluation risk for the leading stablecoin, Tether, using data from the futures market. It desc...
Platform businesses allow for collaboration with nontraditional partners and bring together different categories of customers, in the financial context savers and investors or lenders and borrowers, creating large, scalable networks of users. Their entry into finance promises potential benefits to consumers in the form of new products, lower prices...
This chapter reviews the academic and policy debate on the association between financial globalization and inequality. The evidence suggests that the distributional impact of financial globalization is context-specific and different types of flows have different distributional implications, though the consensus points to unequalizing effects of cap...
Rising inequality and widespread poverty, social unrest and polarization, gender and ethnic disparities, declining social mobility, economic fragility, unbalanced growth due to technology and globalization, and existential danger from climate change are urgent global concerns of our day. These issues are intertwined. They therefore require a holist...
This paper reviews the operation of the Bretton Woods international monetary system 50 years after the United States closed the Gold Window linking the dollar to gold in August 1971. It argues that Bretton Woods operated as successfully as it did owing to three special circumstances: low international capital mobility, tight financial regulation, a...
We ask whether epidemic exposure leads to a shift in financial technology usage within and across countries and if so who participates in this shift. We exploit a datasetcombining Gallup World Polls and Global Findex surveys for some 250,000 individuals in 140 countries, merging them with information on the incidence of epidemics and local 3G inter...
The second volume of The Cambridge Economic History of the Modern World explores the development of modern economic growth from 1870 to the present. Leading experts in economic history offer a series of regional studies from around the world, as well as thematic analyses of key factors governing the differential outcomes in different parts of the g...
In this paper we seek to make headway on the question of what recovery from Covid-19 recession may look like, focusing on the duration of the recovery – that is, how long it will take to re-attain the levels of output and employment reached at the prior business cycle peak. We start by categorizing all post-1960 recessions in advanced countries and...
In this paper I seek to understand the roots of South African macroeconomic outperformance since 1929 and whether it can be reconciled with what I have described as conventional wisdom about recovery from the Depression. Unsurprisingly, I find a way of fitting South Africa into that story. In addition, I try to understand better why, if going off t...
Using newly assembled data on foreign exchange market intervention, we construct a daily index of exchange market pressure during the 1992-3 crisis in the European Monetary System. Using this index, we pinpoint when and where the crisis was most severe. Our analysis focuses on a neglected factor in the crisis: the role of the weak dollar in intra-E...
We review the debate on the association of financial globalization with inequality. We show that the within-country distributional impact of capital account liberalization is context specific and that different types of flows have different distributional effects. Their overall impact depends on the composition of capital flows, their interaction,...
We review the debate on the association of financial globalization with inequality. We show that the within-country distributional impact of capital account liberalization is context specific and that different types of flows have different distributional effects. Their overall impact depends on the composition of capital flows, their interaction,...
I provide a structured comparison of the nineteenth-century classical gold standard and the Euro, basing my analysis heavily on recent research. Both similarities and differences are evident in the historical record. Both regimes were vaunted as engines of convergence, but in both cases convergence was incomplete. Both were seen as delivering fisca...
It is sometimes said that an effect of the COVID-19 pandemic will be heightened appreciation of the importance of scientific research and expertise. We test this hypothesis by examining how exposure to previous epidemics affected trust in science and scientists. Building on the “impressionable years hypothesis” that attitudes are durably formed dur...
Political polarization, meaning sharp differences in the political ideologies and preferences of the partisans of different parties, implies that members of one party are more likely to dismiss the policies and recommendations of spokesmen and appointees of the other party on the grounds that those policies and recommendations are informed by value...
We analyze the role of economic and security considerations in bilateral trade agreements. We use the pre‐World War I period to test whether trade agreements are governed by standard gravity variables, or by instead – or in addition – geopolitical factors. While we like others find support for standard gravity variables, we also find that defense p...
The insulating properties of flexible exchange rates have long been a highly contentious issue in emerging markets—not least in Asian emerging markets. A number of recent theoretical and empirical studies question whether a trade-off exists between rigid exchange rate regimes and insulation from foreign shocks when the degree of international capit...
What will be political legacy of the Coronavirus pandemic? We find that epidemic exposure in an individual's impressionable years (ages 18 to 25) has a persistent negative effect on confidence in political institutions and leaders. We find similar negative effects on confidence in public health systems, suggesting that the loss of confidence in pol...
An effect of the COVID-19 pandemic, it is sometimes suggested, will be to reverse the secular trend toward questioning the value of scientific research and expertise. We analyze this hypothesis by examining how exposure to previous epidemics affected the confidence of individuals in science and scientists. Consistent with theory and evidence that a...
Cambridge Core - Economic History - Promoting Global Monetary and Financial Stability - edited by Claudio Borio
Why was recovery from the euro area crisis delayed for a decade? The explanation lies in the absence of credible and timely policies to backstop financial intermediaries and sovereign debt markets. In this paper we add light and color to this analysis, contrasting recent experience with the 1992–3 crisis in the European Monetary System, when nation...
The macroeconomic effects of U.S. tariffs and foreign retaliation have been surprisingly small to date. Does this mean that the macroeconomic effects of the collapse of the global trading system would also be limited? I consider different perspectives on this limited macroeconomic fallout, including (i) that it takes a lot of Harberger Triangles to...
Tamás Vonyó has written an important book on the Wirtschaftswunder, as West Germany’s economic growth miracle in the third quarter of the twentieth century is known. In The Economic Consequences of the War: West Germany’s Growth Miracle after 1945, Vonyó offers a new interpretation of the postwar growth process, which he substantiates with a panopl...
This paper examines the international financial consequences of Brexit. It first provides a survey of the still limited literature on EU membership and international capital flows. It then provides new estimates of the impact of Brexit on cross-border investment utilizing data from the IMF’s Consolidated Portfolio Investment Survey. It lastly provi...
It is sometimes said that an effect of the COVID-19 pandemic will be heightened appreciation of the importance of scientific research and expertise. We test this hypothesis by examining how exposure to previous epidemics affected trust in science and scientists. Building on the “impressionable years hypothesis” that attitudes are durably formed dur...
We consider public debt from a long-term historical perspective, showing how the purposes for which governments borrow have evolved. Periods when debt-to-GDP ratios rose explosively as a result of wars, depressions, and financial crises also have a long history. Many of these episodes resulted in debt-management problems resolved through debasement...
We consider the correlates of international financial‐center status. Our estimates point to the flexibility, transparency, and stability of the economic and social environment as determinants of financial center‐status. They point also to roles for monetary and financial stability, financial openness, financial scale and development, technology and...
Distinguishing between two different schools of thought that are named after two different universities, Harvard and Berkeley, the article looks at the evolution, past and future, of the international monetary system. While the empirical view holds that the system will remain unipolar and dollar-based, the opposing view uses history to contend that...
We assess the role of economic and security considerations in the currency composition of international reserves. We contrast the ‘Mercury hypothesis’ that currency choice is governed by pecuniary factors familiar to the literature, such as economic size and credibility of major reserve currency issuers, against the ‘Mars hypothesis’ that this depe...
This paper analyzes the international monetary and financial implications of the UK's potential exit from the European Union, focusing on the impact on cross-border capital flows, on London's status as an international financial center, on the roles of sterling and the euro as international and reserve currencies, and on the roles of the UK and EU...
This chapter considers the rise and fall of international currencies in history and their relationship with banks and financial markets. It takes a long view, tracing the rise and decline of international currencies from the silver drachma coined in Athens in the fifth century bc to the Roman solidus, the Genoese genoin, the Florentine florin and t...
The Meseberg Declaration of June 2018 summarizes the state of play on euro area reform. It indicates areas where there is agreement in principle between leading governments on measures to strengthen the resilience of their monetary union, but no agreement as yet on how to implement those measures. It indicates also areas where there is not even agr...
What are the origins and nature of today’s most prevalent forms of Western populism? Where do they carry the most risks? This essay offers a brief survey and outlook for populism in Europe and the United States.
This lecture discusses the work by the Estonian economist Ragnar Nurkse (1907–1959). It focuses on the early Nurkse, who was concerned with exchange rates, capital flows and what today we call the international financial architecture. It asks how many of the conclusions of International Currency Experience [Nurkse, R. (1944). International Currency...
We analyze the ‘plurilateralization’ of global financial governance, defined as the proliferation of bilateral, regional and global governance arrangements, exploring how these have shaped international monetary and financial relations. We argue that the added layers of governance are the outgrowth of four factors: the demand for an international l...
In the 1990s it was widely agreed that neither Europe nor the United States satisfied the conditions for constituting an optimum currency area, although the U.S. came closer (Bayoumi and Eichengreen 1993). Moderating this concern about Europe was the fact that it was possible to distinguish a regional core and periphery. Using updated data, we conf...
Cambridge Core - Economic Theory - Sveriges Riksbank and the History of Central Banking - edited by Rodney Edvinsson
This Mundell-Fleming Lecture focuses on the connections between trade policy and the macroeconomy. Part I considers the evidence on tariffs and growth from an historic vantage point. Part 2 then reviews what we know about trade policy and macroeconomic fluctuations. Although the first part is about growth and the second part is about fluctuations,...
According to conventional wisdom, capital flows are fickle. Focusing on emerging markets, we ask whether this conventional wisdom still holds in our contemporary world. Our results show that, despite recent structural and regulatory changes, much of it survives. Foreign direct investment (FDI) inflows are more stable than non-FDI inflows. Within no...
We review the growth experience of middle-income countries. Economic factors associated with growth appear to differ between middle-income and other countries. The efficiency of the financial system is importantly related to the growth rate in low- and middle-income countries, but appears to matter less as one moves up the income scale. Demographic...
Contrary to widespread presumption, a surprisingly large number of countries have been able to finance a significant fraction of their investment for extended periods using foreign finance. While many of these episodes are in countries where official finance is important, we also identify episodes where a substantial fraction of domestic investment...
Productivity growth is slowing around the world. In 2015, the growth of total factor productivity (TFP) hovered around zero for the fourth straight year, down from 1 percent in 19962006 and 0.5 percent in 200712. In this paper we identify previous episodes of sharp and sustained decelerations in TFP growth using data for a large sample of countries...
Deflation has emerged as a concern for Asian policy makers. The traditional view is this concern is warranted – that deflation can lead to a vicious cycle of falling demand and prices, and is therefore a dangerous condition. However, another revisionist school of thought emphasizes the role of positive supply shocks in deflation and takes a more be...
We study the impact of technology on the reaction of financial markets to information, focusing on the foreign exchange market. We contrast the “thin-skinned†view that technological improvements cause markets to react more to new information with the “thick-skinned†view that they react less. We pinpoint exogenous technological changes using...
Previous studies have focused on when the renminbi will play a significant role as an international currency, but less attention has been paid to where. We fill this gap by contrasting two answers to the question. One is that the renminbi will assume the role of a global currency similar to the U.S. dollar. Supporters point to China's widely divers...
Citations
... Non Communicable Diseases (NCD) burden is fueled by the interplay of demographic and lifestyle factors, urbanization [9][10][11] and economic stagnation [12] in LMICs, resulting in a higher demand for health services [13][14][15][16]. However, despite higher CVD burden and subsequent demands, LICs have lower first hospitalization rates and CVD medication use reflecting poor access to health care [3,4]. ...
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... Aizenman et al. (2020) assembled data for 58 countries from reports to the IMF on reserves in the form of nontraditional currencies. Arslanalp et al. (2022) used more detailed data disclosed by 80 economies utilizing the dataset compiled by Ito and McCauley (2020) as updated by Chinn et al. (2022), the IMF's Data Template and central bank annual reports. ...
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... The outbreak of the COVID-19 pandemic increased the importance of digitalization and the use of electronic banking conditions, according to papers on this topic during the past few years. Saka et al. (2022) investigated whether exposure to the COVID-19 pandemic affected the change of financial technologies used in a large number of countries. They combined data from the Gallup World Polls and Global Findex surveys in their research, covering about 250,000 individuals in 140 countries along with information on the incidence of epidemics and local 3G internet infrastructure and they used the linear probability model with difference-in-differences. They found that the pandemic affected the increase in remote access to banking services (an increase in transactions performed via online and mobile banking) and a decrease in those performed in branches. ...
... In the near-term, the U.S. dollar's reserve currency status is buttressed both by close U.S. allies (who are less likely to incur sanctions since they receive security guarantees from the U.S. or hold similar political ideals as the U.S.) holding the majority of dollardenominated FX reserves and by countries with less formal military ties having strong economic incentives to hold their FX reserves in U.S. dollar assets. These economic motives are likely to remain substantial over the near-term, but-over the span of Ito and McCauley (2020) and Arslanalp, Eichengreen, and Simpson-Bell (2022) provide empirical evidence on the relationship between export invoicing share and FX reserve share. Like this paper, Chinn and Frankel (2008) also extrapolate from regression results to address an earlier question about the status of the euro against the U.S. dollar. ...
... e overall process and transaction contract are relatively perfect, and the comprehensive scale has also been significantly improved. At present, China's bond market has become an important part of finance [4][5][6]. is kind of digital bond cannot be separated from the trading contract system in the process of circulation and trading. However, most of these systems are established by financial institutions alone, and there is no unified specification and guarantee for users. ...
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... Building from this existing research, this paper aims to make three principal contributions. First, connecting with wider-ranging debates over the problems and prospects of regulation across digital platform economies (Flew, 2021), we investigate the ways in which financial regulators are responding to the challenge of FinTech as a novel political economy of platforms (Eichengreen, 2021;Langley and Leyshon, 2021). Applications of digital technologies in relational and networked FinTech economies can be understood to be producing an array of new 'ecologies' of retail money and finance across the globe, anchored in extant financial and technology agglomerations and featuring distinct institutional structures and cultures of innovation (Leyshon, 2020). ...
... By contrast, we are interested in identifying the general effect of 'good news', especially when seemingly unrelated to government actions and performance. The result is surprising because, in contrast with the literature on the determinants of government trust where it is government actions and efficacy that cause changes in trust [12,13], we find that trust in governments depends on something other than their actions, at least during COVID-19-like episodes. There is a large literature in psychology on how positive (negative) news can cause positive (negative) affect or mood changes in individuals with the result that individuals assess events and behave differently and usually in a manner congruent with their mood change [14]. ...
... Second, we contribute to the literature linking the COVID-19 crisis to individual preferences and political attitudes. Research has shown that the pandemic crisis affects people's views on a number of outcomes such as trust in national governments (Esaiasson et al. 2020;Fazio et al. 2022;Hensel et al. 2022;Lazarus et al. 2020;Saka et al. 2022), economic anxiety (Fetzer et al. 2020) and support for safety-net programs (Balasundharam et al. 2021;Rees-Jones et al. 2020). Asaria et al. (2021) investigate the effect of the pandemic shock on income and health inequality aversion in the United Kingdom, Italy, and Germany. ...
... A key precondition for developing the digital economy is investment in digital infrastructure, which 2 includes investment in ICT infrastructure, energy infrastructure, technology transfer, and human capital (Saka et al. 2021). ...
... More precisely, a fiscal gap indicates government budget constraints, especially where governments in SSA countries do not have sufficient financial resources to finance development expenses and are unable to generate adequate domestic funds (taxes).Therefore, foreign borrowing plays a monumental role in financing the government's spending on growth. Eichengreen et al., (2019) theory of public spending, taxes, and debt, the tax-smoothing model offers insights into how SSA countries accumulate debt through a fiscal gap by differentiating between transitory and permanent government expenditure movements. The actual effect is that through permanent shock in the economy, the government can finance debt due to temporary shock and tax finance. ...
