Barry J. Eichengreen

International Economist at UC Berkeley
World-Renowned Currency Expert

Looking into the future of the dollar, the euro, and the international monetary system.

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Biography

Barry Eichengreen is one of the world’s foremost experts on the international monetary system and global finance. His research and writings have illuminated the current financial crisis and uncovered many of its far reaching consequences.

One issue upon which his advice and counsel is sought is the question of the future of the dollar — Will it lose its status as the world’s most important currency?

A specialist in the role of the dollar worldwide, he argues that in the future, the dollar may be a less dominant but still viable as a means of international exchange. But it may have to share its previous starring role with other currencies.

As Dr. Eichengreen has said, the issue now is "to secure a place for the dollar in the multiple-international-currency system that is coming."

He explores the future of the monetary system, the ramifications of the possible decline of the dollar on the system and on the US and world economies in his latest book, Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System.

Chosen for Financial Times/Goldman Sachs Best Business Book of 2011 short list.

"A fascinating and readable account of the dollar’s rise and potential fall... Mr. Eichengreen does not think the dollar is about to be vanquished as sterling was. Rather, he foresees a "multipolar" system of international currencies."
The Economist

"When everyone from Brazil's leader to Sarah Palin questions the dollar's status as a reserve currency, it is time for an expert to sort out the truth from the hyperbole. Barry Eichengreen performs this service with unwavering clarity."
— Sebastian Mallaby, Council on Foreign Relations

"Professor Eichengreen has written a truly superb book on the role and global standing of the dollar—past, present and future. Those exposed to the evolution of the globally economy, and that's virtually all of us, will find his book extremely thoughtful and a great read."
— Mohamed El-Erian, CEO and co-CIO of PIMCO

An expert on financial crises, Dr. Eichengreen has written extensively on their histories, causes and cures. Some of his recent research compared the early stages of the current financial crisis with the Great Depression, ominously finding that our 21st century crisis started off being much more severe than the previous one.

He also has a previous book on crises entitled Financial Crises: And What to Do about Them.

"If you want a clear and balanced exposition of the whys and wherefores of the recurring financial crises of the emerging world, Barry Eichengreen is your man. Financial Crises doesn't conclude with a surefire remedy — it explains why there are none. What the book does is to tell you why that is true and what we can do to help reduce the pain."
— Paul A. Volcker

Dr. Eichengreen’s writings have appeared in the Financial Times, The Wall Street Journal, Foreign Affairs, and numerous other newspapers and periodicals. He writes a regular monthly column for Project Syndicate.

Books

Hall of Mirrors

The Great Depression, The Great Recession, and the Uses— and Misuses—of History

Barry J. Eichengreen

There have been two global financial crises in the past century: the Great Depression of the 1930s and the Great Recession that began in 2008. Both featured loose credit, precarious real estate and stock market bubbles, suspicious banking practices, an inflexible monetary system, and global imbalances; both had devastating economic consequences. In both cases, people in the prosperous decade preceding the crash believed they were living in a post-volatility economy, one that had tamed the cycle of boom and bust. When the global financial system began to totter in 2008, policymakers were able to draw on the lessons of the Great Depression in order to prevent a repeat, but their response was still inadequate to prevent massive economic turmoil on a global scale.

In Hall of Mirrors, renowned economist Barry Eichengreen provides the first book-length analysis of the two crises and their aftermaths. Weaving together the narratives of the 30s and recent years, he shows how fear of another Depression greatly informed the policy response after the Lehman Brothers collapse, with both positive and negative results. On the positive side, institutions took the opposite paths that they had during the Depression; government increased spending and cut taxes, and central banks reduced interest rates, flooded the market with liquidity, and coordinated international cooperation. This in large part prevented the bank failures, 25% unemployment rate, and other disasters that characterized the Great Depression. But they all too often hewed too closely and too literally to the lessons of the Depression, seeing it as a mirror rather than focusing on the core differences. Moreover, in their haste to differentiate themselves from their forbears, today's policymakers neglected the constructive but ultimately futile steps that the Federal Reserve took in the 1930s. While the rapidly constructed policies of late 2008 did succeed in staving off catastrophe in the years after, policymakers, institutions, and society as a whole were too eager to get back to normal, even when that meant stunting the recovery via harsh austerity policies and eschewing necessary long-term reforms. The result was a grindingly slow recovery in the US and a devastating recession in Europe.

Hall of Mirrors is not only a monumental work of economic history, but an essential exploration of how we avoided making only some of the same mistakes twice--and why our partial remedy makes us highly susceptible to making other, equally important mistakes yet again.

Oxford University Press (January 2, 2015)

The Korean Economy

From a Miraculous Past to a Sustainable Future

Barry Eichengreen, Wonhyuk Lim, Yung Chul Park
and Dwight H. Perkins

South Korea has been held out as an economic miracle — as a country that successfully completed the transition from underdeveloped to developed country status — and as an example of how a middle-income country can continue to move up the technology ladder into the production and export of more sophisticated goods and services. But with these successes have come challenges, among them poverty, inequality, long work hours, financial instability, and complaints about the economic and political power of the country’s large corporate conglomerates, or chaebol.

The Korean Economy provides an overview of Korean economic experience since the 1950s, with a focus on the period since democratization in 1987. Successive chapters analyze the Korean experience from the perspectives of political economy, the growth record, industrial organization and corporate governance, financial development and instability, labor and employment, inequality and social policy, and Korea’s place in the world economy. A concluding chapter describes the country’s economic challenges going forward and how they can best be met. The volume also serves to summarize the findings of companion volumes in the Harvard-Korean Development Institute series on the Korean economy, also published by the Harvard University Asia Center.

Harvard University Asia Center (December 15, 2014)

The World Economy After the Global Crisis

A New Economic Order for the 21st Century (World Scientific Studies in International Economics)

Barry Eichengreen and Bokyeong Park

The global credit crisis of 2008-2009 was the most serious shock to the world economy in fully 80 years. It was for the world as a whole what the Asian crisis of 1997-1998 was for emerging markets: a profoundly alarming wake-up call. By laying bare the fragility of global markets, it raised troubling questions about the operation of our deeply integrated world economy. It cast doubt on the efficacy of the dominant mode of light-touch financial regulation and more generally on the efficacy of the prevailing commitment to economic and financial liberalization. It challenged the managerial capacity of inherited institutions of global governance. And it augured a changing of the guard, pointing to the possibility that the economies that had been the leaders in the "global growth stakes" in the past might no longer be the leaders in the future. What the crisis means for reform, however, is still unclear. This book brings together leading scholars and policy analysts to describe and weigh the options. Successive chapters assess options for the global financial system, the global trading system, the international monetary system, and the Group of 20 and global governance. A final set of chapters contemplates the policy challenges for emerging markets and the advanced economies in the wake of the financial crisis.

World Scientific Publishing (US: May 3, 2012; UK: 25 Jun 2012)

From Miracle to Maturity

The Growth of the Korean Economy

Barry Eichengreen, Dwight H. Perkins, and Kwanho Shin

The economic growth of South Korea has been a remarkable success story. After the Korean War, the country was one of the poorest economies on the planet; by the twenty-first century, it had become a middle-income country, a member of the Organization of Economic Cooperation and Development (the club of advanced economies), and home to some of the world’s leading industrial corporations. And yet, many Koreans are less than satisfied with their country’s economic performance, given the continuing financial volatility and sluggish growth since the Korean economic crisis of 1997–1998.

From Miracle to Maturity offers a comprehensive qualitative and quantitative analysis of the growth of the Korean economy, starting with the aggregate sources of growth (growth of the labor force, the stock of capital, and productivity) and then delving deeper into the roles played by structural change, exports, foreign investment, and financial development. The authors provide a detailed examination of the question of whether the Korean economy is now underperforming and ask, if so, what can be done to solve the problem.

Harvard University Asia Center (October 8, 2012)

Exorbitant Privilege

The Rise and Fall of the Dollar and the Future of the International Monetary System

Barry J. Eichengreen

Financial Times/Goldman Sachs Best Business Book of 2011 Short List

For more than half a century, the U.S. dollar has been not just America's currency but the world's. It is used globally by importers, exporters, investors, governments and central banks alike. Nearly three-quarters of all $100 bills circulate outside the United States. The dollar holdings of the Chinese government alone come to more than $1,000 per Chinese resident.

This dependence on dollars, by banks, corporations and governments around the world, is a source of strength for the United States. It is, as a critic of U.S. policies once put it, America's "exorbitant privilege." However, recent events have raised concerns that this soon may be a privilege lost. Among these have been the effects of the financial crisis and the Great Recession: high unemployment, record federal deficits, and financial distress. In addition there is the rise of challengers like the euro and China's renminbi. Some say that the dollar may soon cease to be the world's standard currency — which would depress American living standards and weaken the country's international influence.

In Exorbitant Privilege, one of our foremost economists, Barry Eichengreen, traces the rise of the dollar to international prominence over the course of the 20th century. He shows how the greenback dominated internationally in the second half of the century for the same reasons — and in the same way — that the United States dominated the global economy. But now, with the rise of China, India, Brazil and other emerging economies, America no longer towers over the global economy. It follows, Eichengreen argues, that the dollar will not be as dominant. But this does not mean that the coming changes will necessarily be sudden and dire — or that the dollar is doomed to lose its international status. Challenging the presumption that there is room for only one true global currency — either the dollar or something else — Eichengreen shows that several currencies have shared this international role over long periods. What was true in the distant past will be true, once again, in the not-too-distant future.

The dollar will lose its international currency status, Eichengreen warns, only if the United States repeats the mistakes that led to the financial crisis and only if it fails to put its fiscal and financial house in order. The greenback's fate hinges, in other words, not on the actions of the Chinese government but on economic policy decisions here in the United States.

Incisive, challenging and iconoclastic, Exorbitant Privilege is a fascinating analysis of the changes that lie ahead. It is a challenge, equally, to those who warn that the dollar is doomed and to those who regard its continuing dominance as inevitable.

Oxford University Press, USA (January 7, 2011)

Book Review

The squeeze is onThe Economist

Praise

"Exorbitant Privilege is a book for anyone who has been perplexed why, despite the frequent predictions of the dollar's demise over the last fifty years, it has managed to maintain its position as the world's pre-eminent reserve currency. The book includes both a lively historical account of the dollar's role in the international monetary system and an incisive and balanced discussion of future challenges."
— Liaquat Ahamed, author of Lords of Finance

"When everyone from Brazil's leader to Sarah Palin questions the dollar's status as a reserve currency, it is time for an expert to sort out the truth from the hyperbole. Barry Eichengreen performs this service with unwavering clarity."
— Sebastian Mallaby, Council on Foreign Relations

"Professor Eichengreen has written a truly superb book on the role and global standing of the dollar—past, present and future. Those exposed to the evolution of the globally economy, and that's virtually all of us, will find his book extremely thoughtful and a great read."
— Mohamed El-Erian, CEO and co-CIO of PIMCO

"Eichengreen is the master of international money in history and its troubles. Exorbitant Privilege is a fine account of whence it came and a judicious survey of where it might go."
— James K. Galbraith, author of The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too

"Barry Eichengreen again demonstrates his ability to integrate economic history and theory with political analysis in order to illuminate the critical issues of international finance. The timely and accessible book is must reading for all concerned with the prospective balance of international power—financial, economic and political—in a multi-polar world."
William H. Janeway, Warburg Pincus

"Barry Eichengreen's book couldn't be more timely . . . Elegant and pithy."
— Finance & Development, IMF.org

Emerging Giants

China and India in the World Economy

Barry Eichengreen, Poonam Gupta, and Rajiv Kumar (Editors)

China and India are the two most populous countries in the world and now also two of the fastest growing. By sheer virtue of the fact that China and India are home to 2.4 billion people — two-fifths of the world's population — the rapid growth of their economies has far-reaching implications not just for global living standards and poverty reduction but also for competitiveness and distribution of income in the rest of the world. Commensurate with their economic progress, there has been a surge of interest in the nature and implications of China and India's economic growth.

There are several apparent similarities in the development process of China and India: both are home to ancient civilizations that have bequeathed distinctive attitudes, institutions, and traditions. Both have very large populations. Both have performed well economically for more than two decades. However there are important differences that can be seen beneath the surface. China started the current reform process in 1978 — that is, almost fifteen years before India. The two countries have very different political systems. Their development models differ fundamentally as well. China has opened up much more than India to foreign trade and foreign direct investment, while India has a better developed banking system. Growth in the two countries has been driven by different sectors — Chinese growth by manufacturing and Indian growth by services.

This volume brings together some of the best research on issues related to the growth experience of China and India and places these issues in a comparative perspective. It contains papers written by some of the leading academic and experts in the world on issues ranging from the roles of China and India in the world economy, contrasts in their development experience, and challenges to sustaining growth.

Oxford University Press, USA (June 29, 2010)

The European Economy since 1945

Coordinated Capitalism and Beyond

Barry J. Eichengreen

In 1945, many Europeans still heated with coal, cooled their food with ice, and lacked indoor plumbing. Today, things could hardly be more different. Over the second half of the twentieth century, the average European's buying power tripled, while working hours fell by a third. The European Economy since 1945 is a broad, accessible, forthright account of the extraordinary development of Europe's economy since the end of World War II. Barry Eichengreen argues that the continent's history has been critical to its economic performance, and that it will continue to be so going forward.

Challenging standard views that basic economic forces were behind postwar Europe's success, Eichengreen shows how Western Europe in particular inherited a set of institutions singularly well suited to the economic circumstances that reigned for almost three decades. Economic growth was facilitated by solidarity-centered trade unions, cohesive employers' associations, and growth-minded governments — all legacies of Europe's earlier history. For example, these institutions worked together to mobilize savings, finance investment, and stabilize wages.

However, this inheritance of economic and social institutions that was the solution until around 1973 — when Europe had to switch from growth based on brute-force investment and the acquisition of known technologies to growth based on increased efficiency and innovation — then became the problem.

Thus, the key questions for the future are whether Europe and its constituent nations can now adapt their institutions to the needs of a globalized knowledge economy, and whether in doing so, the continent's distinctive history will be an obstacle or an asset.

Princeton University Press (November 13, 2006)
Princeton University Press (July 1, 2008)

Global Imbalances and the Lessons of Bretton Woods (Cairoli Lectures)

Barry J. Eichengreen

In Global Imbalances and the Lessons of Bretton Woods, Barry Eichengreen takes issue with the argument that today's international financial system is largely analogous to the Bretton Woods System of the period 1958 to 1973. Then, as now, it has been argued, the United States ran balance of payment deficits, provided international reserves to other countries, and acted as export market of last resort for the rest of the world. Then, as now, the story continues, other countries were reluctant to revalue their currencies for fear of seeing their export-led growth slow and suffering capital losses on their foreign reserves. Eichengreen argues in response that the power of historical analogy lies not just in finding parallels but in highlighting differences, and he finds important differences in the structure of the world economy today. Such differences, he concludes, mean that the current constellation of exchange rates and payments imbalances is unlikely to last as long as the original Bretton Woods System.

Two of the most salient differences are the twin deficits and low savings rate of the United States, which do not augur well for the sustainability of the country's international position. Such differences, he concludes, mean that the current constellation of exchange rates and payments imbalances is unlikely to last as long as the original Bretton Woods System.

After identifying these differences, Eichengreen looks in detail at the Gold Pool, the mechanism through which European central banks sought to support the dollar in the 1960s. He shows that the Pool was fragile and short lived, which does not bode well for collective efforts on the part of Asian central banks to restrain reserve diversification and support the dollar today. He studies Japan's exit from its dollar peg in 1971, drawing lessons for China's transition to greater exchange rate flexibility. And he considers the history of reserve currency competition, asking if it has lessons for whether the dollar is destined to lose its standing as preeminent international currency to the euro or even the Chinese renminbi.

The MIT Press (September 8, 2006)
The MIT Press (March 31, 2010)

Financial Crises: And What To Do About Them

Barry J. Eichengreen

Financial Crises: And What To Do About Them provides a critical and concise assessment of how to more effectively manage financial crises in emerging markets and economies. Written by an expert in the financial sector, he gives realistic and sound advise on how to create and maintain the financial system of the world. This book gives complete theories of why financial crises still exist at the level it does. It discusses the International Monetary Fund (IMF) and their role in helping (and sometimes hurting) the situation. Finally, the author presents the theory of restructuring "friendly" provisions into complete loan agreements thus making creditors and debtors take more responsibility for their own financial situations.

Oxford University Press, USA (November 7, 2002)

Globalizing Capital

A History of the International Monetary System

Barry J. Eichengreen

First published more than a decade ago, Globalizing Capital remains an indispensable part of the economic literature today. Written by renowned economist Barry Eichengreen, this classic book emphasizes the importance of the international monetary system for understanding the international economy. Brief and lucid, Globalizing Capital is intended not only for economists, but also a general audience of historians, political scientists, professionals in government and business, and anyone with a broad interest in international relations. Eichengreen demonstrates that the international monetary system can be understood and effectively governed only if it is seen as a historical phenomenon extending from the period of the gold standard to today's world of fluctuating prices.

This updated edition continues to document the effect of floating exchange rates and contains a new chapter on the Asian financial crisis, the advent of the euro, the future of the dollar, and related topics. Globalizing Capital shows how these and other recent developments can be put in perspective only once their political and historical contexts are understood.

Princeton University Press (October 28, 1996)
Princeton University Press; 2 edition (September 15, 2008)

Topics

Barry tailors each presentation to the needs of his audience and is not limited to the topics we have listed below. These are subjects that have proven valuable to customers in the past and are meant only to suggest his range and interests. Please ask us about any subject that interests you; we are sure that we can accommodate you.

Global Shifts

The International Economic Landscape

Videos

The Dollar as the World's Currency

Feedback

A leading global insurance provider:
I would like to thank you for sharing your insights and ideas at our annual […] Conference. We appreciate the time you spent developing your presentation on the central banks and currency regimes for our audience.

Your talk gave us a unique view of the current economic environment, along with a fascinating historical perspective. Your viewpoints will be key input into our strategy discussions as we navigate the complex markets we face today and tomorrow.

A world’s leading textile and information provider:
Dear Barry — This is the first opportunity I've had to thank you for your contribution to the event. We've had very positive feedback and in the days that followed I have heard several conversations stimulated by your projections of the possible futures of China, Germany, India and the USA. I noticed you in conversation with [...] in the garden afterwards, and that's something he in particular will remember — as an economist himself he knew your work and was very keen to meet you!

Articles

— Financial Times
— Project Syndicate
— Project Syndicate
— Project Syndicate
— Project Syndicate
— Project Syndicate
— Forefront
— Project Syndicate
— Project Syndicate
— Project Syndicate
— The Wall Street Journal