Gold, France, and the Great Depression, 1919-1932

H. Clark Johnson develops a convincing and original narrative of the events that led to the major economic catastrophe of the twentieth century. He identifies the undervaluation and consequent shortage of world gold reserves after World War I as the underlying cause of a sustained international price deflation that brought the Great Depression. And, he argues, the reserve-hoarding policies of central banks—particularly the Bank of France—were its proximate cause. The book presents a detailed history of the events that culminated in the depression, highlighting the role of specific economic incidents, national decisions, and individuals. Johnson’s analysis of how French domestic politics, diplomacy, economic ideology, and monetary policy contributed to the international deflation is new in the literature. He reaches provocative conclusions about the functioning of the pre-1914 gold standard, the spectacular postwar movement of gold to India, the return of sterling to prewar parity in 1925, the German reparations controversy, the stock market crash of 1929, the Smoot-Hawley tariff of 1930, the central European banking crisis of 1931, and the end of sterling convertibility in 1931. The book also provides a nuanced picture of Keynes during the years before his General Theory and deals at length with the history of economic thought in order to explain the failure of recent scholarship to adequately account for the Great Depression.

The subject of this paper will be the Central Bank's monetary policy in terms of the Albanian monetary market. Its purpose will be to determine the effects of monetary policy, its consequences on some of the key macroeconomic indicators. From the analysis of data, it was found that the Central Bank's policy, which has its main objective, "achieving and preserving the level of prices", is applied in the conditions of an unequal monetary market, because the money market is almost divided equal to 50/50 between currency and local currency (All). These main internal factors, and other external factors, have made the monetary policy applied by the Central Bank to have no impact or have negative consequences on key macroeconomic indicators. Central Bank monetary policy is currently smothered. Some of the negative consequences are: the decline of the impact on the inflation indicator, the transition of the Albanian economy to the "liquid trap", the change in the structure of deposit usage in favor of debt instruments, decrease of deposits in total and deposits in lek, the decline in purchasing power of deposits, the reduction of credit and the change of their structure, consequently the reduction of productive investments, euro depreciation, trade deficit growth, etc. Under these conditions, only fiscal policies have an impact. In order for the Central Bank's policies to become effective, with concrete implications on the economic indicators, fundamental changes need to be made. First, change its main objective by having the main objective "currency stability and economic growth" secondly, to establish a fully state-owned commercial bank in order to support the monetary policies and key sectors of the economy. The methods used in this paper are the method of description, comparison, analysis and synthesis, statistical methods etc.

Pre- versus post-crisis central banking in Qatar

We estimate a monetary policy rule for the US allowing for possible frequency dependence -- i.e., allowing the central bank to respond differently to more persistent innovations than to more transitory innovations, in both the unemployment rate and the inflation rate. Our estimation method uses real-time data in these rates -- as did the FOMC -- and requires no a priori assumptions on the pattern of frequency dependence or on the nature of the processes generating either the data or the natural rate of unemployment. Unlike other approaches, our estimation method allows for possible feedback in the relationship. Our results convincingly reject linearity in the monetary policy rule, in the sense that we find strong evidence for frequency dependence in the key coefficients of the central bank's policy rule: i.e., the central bank's federal funds rate response to a fluctuation in either the unemployment or the inflation rate depended strongly on the persistence of this fluctuation in the recently observed (real-time) data. These results also provide useful insights into how the central bank's monetary policy rule has varied between the Martin-Burns-Miller and the Volcker-Greenspan time periods.

The determination of interest rate spread in commercial banks is influenced by various macroeconomic variables, market microstructure features and the policy environment. However, studies on factors that contribute to the interest rate spreads among commercial banks in Kenya have produced mixed results that calls for further research. This study aimed to assess the determinants of interest rate spread in commercial banks in Kenya. Specifically, the study sought to establish the effect of inflation rate, domestic borrowing, credit risk and exchange rate risk on the interest rate spreads among commercial banks in Kenya. The study was anchored on fisher hypothesis, classical theory of interest and loanable fund theories. Explanatory research design was adopted to establish the causal relationship between the study’s variables. Secondary data of the study for the period between 1970 -2022 was extracted from annual financial statements of commercial banks targeted by the study and Central bank of Kenya annual reports. Data was analyzed through descriptive and inferential statistics. The study adopted the regression model to obtain results. Based on the regression results, the study found that domestic borrowing had a significant positive effect on interest rate spreads among commercial banks in Kenya. Additionally, the study found that inflation rate, credit risk and exchange rate risk had a significant positive effect on interest rate spreads among commercial banks in Kenya. The study concluded that macroeconomic variables such as inflation rate, domestic borrowing, credit risk and exchange rate risks are key determinants of interest rate spread among commercial banks in Kenya. The study made the following recommendations to regulators and policy makers. First, ensure that the central bank's monetary policy actions effectively influence interest rates throughout the banking system and also Implement mechanisms to improve the transmission of changes in the central bank's policy rates to commercial banks' lending and deposit rates. Secondly, establish a framework for monitoring key macroeconomic indicators such as inflation, economic growth, exchange rates, and fiscal policies to identify potential factors impacting interest rate spreads and use the monitoring results to formulate timely and appropriate policy responses. The study recommends that future studies should conduct studies across different countries which could provide a more comprehensive understanding of the subject matter.

2 - Supervision and Regulation of Financial Markets in the New Financial Environment

Since January 2020, UK faced a serious epidemic and this COVID had a significant impact on the UK' s economy. In order to make the UK's economy recovered, Bank of England set the monetary and fiscal policy and injected many liquidity into the market to stimulate public's buying demand. After around one and a half years, the inflation grew alongside with the UK economy growth and finally the inflation has reached a historical high level over the past few decade. This essay mainly gather the information from different UK's data website, some news website and bank of England’s official website to introduce the recent inflation and interest rate in UK, analyze the reasons of nowadays high inflation, presented the central bank's recent policy and discussed the prediction of the future inflation and central bank’s policy towards the high inflation. The main findings are that the previous' bank of England’s policy during the COVID-19 period and Russia and Ukraine were the mainly causes and reasons for the nowadays' high and continuous inflation. For the prediction, the inflation in UK is forecast to continue increasing in the short period of time (the end of 2022 and the early of 2023) and it will decrease since the start of late 2023 and be back to the normal stage. Bank of England will continue increasing the bank rate to battle the inflation in the short period of time and then stop add bps and gradually make the bank rate back to the normal value.

The paper explores a New Keynesian Model with diverse beliefs and studies the impact of this heterogeneity on fluctuations and monetary policy. It uses a standard model (e.g. Gali (2008), Walsh (2010) and Woodford (2003)). Aggregation is examined only for the log- linearized economy and even for this economy, aggregation problems are significant and their solutions depend upon the belief structure. Agents' beliefs are described by individual state variables and satisfy three Rationality Axioms. Belief rationality plays a key role in driving belief dynamics and mean market belief is the main tool used to solve the aggregation problems. Macro dynamics is then described by an IS curve, Phillips curve and a monetary rule similar to standard models except that mean market belief is a new force amplifying fluctuations. Due to belief heterogeneity, changes in the policy rule alter key macro-economic parameters which must be deduced from the micro equilibrium, a problem not present in a single agent economy. In addition to belief rationality agents know the equilibrium map. Diverse beliefs alter the problem faced by a central bank since a central source of fluctuations in this paper are not exogenous shocks (assumed small) but fluctuations caused by market expectations, and this alters the role of a central bank. Diverse beliefs impact response to policy due to their effect on motives to consume, supply labor etc. but market belief may support or oppose a central bank's goals. The paper draws general conclusion about efficacy of monetary rules of either contemporaneous or of expected output deviation and inflation with weights . The main conclusions are as follows. (i) Monetary policy can counter the effects of market belief by aggressive anti-inflation policy, but with cost. Large entails volatile financial markets and volatile individual consumption. Volatility of aggregate output is different from volatility of individual consumption and welfare considerations suggest that individual consumption volatility and financial market instability are at least as important goals of central bank as stability of aggregate output. The paper then shows that optimal policy outcomes require a central bank to employ moderate values of . (iii) A central bank that aims to stabilize only inflation and aggregate output can be either a one mandate bank that fights only inflation or a two mandate central bank: each can attain a different segments of the efficiency frontier. (ii) Due to diverse beliefs, the effects of ( , ) are not monotonic. (iii) As a result of (ii) the problem of output stabilization is particularly complex. Indeed, response monotonicity is a desirable property, offering a central bank feasible policy actions whose outcomes are predictable and entailing clearer policy trade-off.(iv) Both efficiency and monotonicity of output stabilization are improved if a central bank uses rules that target inflation and the causes of output volatility which are market belief and exogenous shocks, instead of output. Targeting market belief may be accomplished by targeting asset prices, which reflect market belief. As to optimal policy and forecast-targeting it is seen that under diverse beliefs a bank's optimal policy is not Pareto Optimal and may not even be Pareto improving. Central bank's policy does not alter agents' beliefs about state variables and under forecast targeting the private sector does not adopt the central bank's forecasts even when agents fully understand and accept the policy commitment of the bank since the bank and private sector may disagree about forecasts of endogenous variables. Hence, a bank's optimal policy may be carried out with private market opposition rather than consensus, as is the case under Rational Expectations. Also, an optimal policy relative to a bank's belief adds to privately perceived uncertainty of future bank's belief or actions even when the policy is fully understood.

Comment

Objective: to analyze the anti-inflationary policy of the leading Central banks of the world economy in 2008-2019; to explain the main postulates and discussions in the field of modern monetary theory; to show the features of the formation of anti-crisis measures and trends in the development of monetary policy of Central banks during and after COVID-19.Methods: a system-functional approach to understanding the modern monetary-credit policy of Central banks, taking into account the influence of various factors of the external and internal environment. This allowed defining and using the necessary set of specific research methods - methodological tools of historical, logical, comparative, empirical and statistical methods of knowledge.Results: the article shows that under the new financial crisis triggered by the COVID-19 pandemic, a period of active nationalization and concentration of monetary capital started in the leading countries of the world economy. Central banks are beginning to lose their operational and financial independence, and monetary issues (including credit) in the real economy are likely to be determined not by the market, but solely by the excessive needs of a sovereign government. It is noted that under the increasing sovereign debts, Central banks lose the opportunities for implementing the current anti-inflationary policy. The main elements of the modern monetary theory (MMT) are considered, as well as the features of national economies functioning within the MMT, identified by the authors of this theory.Anti-crisis measures of non-traditional monetary-credit policy were studied, which are implemented by the Central banks of the United States, Europe and Russia in the context of the COVID-19 pandemic, and their effectiveness was evaluated. In addition, a possible scenario for the development of monetary policy of Central banks after the pandemic, including the issue of digital currencies, is identified.Scientifi novelty: the article shows that massive anti-crisis measures of governments and Central banks over the next few years will provoke a global economic crisis, the main characteristics of which will be an imbalance of payment and budget systems, a rapid growth of sovereign debt, spending of economic potential by countries, and a sharp increase in infl and devaluation of national currencies. National countries will try to get out of this crisis by total digitalization of the economy, nationalization of network platforms and fi ancial assets. These processes will most likely begin with the issuance of digital currency by Central banks. Practical relevance: the main provisions and conclusions of the article can be used to specify the target mandates, tools, channels and mechanisms of Central banks’ monetary policy, directly connected with implementation of anti-recessionary measures of sovereign governments and Central banks under the COVID-19 pandemic, and with the radical digital transformation of the entire global monetary-credit system after completion of all predicted stages of the coronavirus outbreak.

The subject of the article is cooperative banking in France, taking into account the specific regulation of this type of banking. The article presents the elements of the history of the creation of cooperative banks in France, the legal basis for the operation of cooperative banks and the specific features that allowed cooperative banks in France to develop significantly. Many factors influenced the position of cooperative banks, among them the factors of historical grounding on the market, flexibility of banking, modernization and adaptation to the national economic policy can be distinguished. In the policy of cooperative banking, the French doctrine emphasizes the values of the social economy, ethics, responsibility, participation of parties, solidarity, proximity to the client. In cooperative banking, the emphasis is on cooperation, mutual assistance and solidarity (collaboration, entraide, solidarité).

The monetary policy of the European Union has recently undergone changes that cannot but have an impact on national economies. Thus, starting in 2018, the new rules for calculating the liquidity of banks and the ratio of borrowed funds to assets will come into full force in the European Union. Several large banks in France, dissatisfied with the policy of the European Central Bank (ECB), even appealed to the European Court of Justice for a change in the rules. Meanwhile, this is another step towards establishing financial transparency and strengthening the banking system. Meanwhile, at the international level, uncertainty still remains over issues of currency and legal responsibility, which is largely due to various legal regulations. In most cases, companies that carry out foreign economic activity violate currency legislation. At the same time, civil measures may not be sufficient to protect the normal functioning and development of the domestic foreign exchange market.

According to the Concept of Long-Term Social and Economic Development of the Russian Federation for the period up to 2020, in the next few years the imbalance in world trade, as well as capital flows, will continue to increase, which will lead to changes in foreign exchange rates. That is why the final goal is to promote priority national interests in the framework of bilateral and multilateral trade and economic relations with foreign countries. In pursuit of this goal, the following improvement of customs regulation, and export and currency control mechanisms in the Russian Federation will be aimed at reducing barriers to foreign economic activity of innovative enterprises. Achievement of the set goals today is subject to the influence of a constantly changing world and new technologies. New technologies are increasingly penetrating the life of modern society. Meanwhile, the speed of introduction of new technologies is such that point changes in current legislation will gradually nullify the effectiveness of legal regulation as a system. Therefore, the changes today should concern not only the monetary and financial sphere, but also take into account other areas. The article is devoted to the study of crucial problems of implementing modern technologies from the legal point of view. Thus, at the international level, uncertainty still remains over issues of currency and legal responsibility, which is largely due to various legal regulations. Starting in 2018, the new rules for calculating the liquidity of banks and the ratio of borrowed funds to assets will come into full force in the European Union. Several large banks in France, dissatisfied with the policy of the European Central Bank (ECB), even appealed to the European Court of Justice for a change in the rules. According to FxPro analysts’ reports, economic growth in Europe has accelerated slightly, and the ECB is on the verge of abandoning its ultra-easy monetary policy in the direction of neutral and is preparing for further tightening. One of the subjects of the research is the system of monetary relations from the point of view of analyzing the problems of ensuring its stability, including criminal and legal means. The purpose of this analysis is to illustrate how to protect the domestic foreign exchange market and the challenges facing the monetary system today. The article has been prepared on the basis of legal and technical analysis of legal norms, as well as comparative legal and formal logical methods and system analysis methodology. In the authors’ view, this could contribute to a uniform approach to the problem, without which it would be extremely difficult to achieve success. It is concluded that in view of new challenges facing the global economy and the emergence of cryptocurrency, it is necessary to rethink the phenomenon of currency crimes, to study the experience of combating monetary crimes in other countries and to evaluate the common mechanisms for combating currency crimes. However, this approach cannot be considered legitimate insofar as different interpretation of the same term in different branches of legislation does not allow full realization of the constitutional rights and freedoms of citizens. After all, branches of legislation do not exist in isolation from one another, but are interrelated. It is concluded that the person conducting proceedings in a case can and is obliged, based on an analysis of the circumstances under consideration, to proceed from a comprehensive assessment of the category used in making the decision as applied to its understanding in aggregate in various branches of legislation. It is also necessary to create a universal state database for judges, prosecutors, investigators, etc., which would allow free cross-sectoral information exchange on the same subject. The new digital economy also requires retraining of civil servants and state employees, including the judiciary branch of government. At the same time, the article deals with the transformation of the legal profession in the future. It is concluded that classical legal education will not sink into oblivion. However, the lawyers of the future will play a slightly different role, namely, they will act as machinists, builders, operators and inventors of a useful model of legal relations for robot judges.

Click to increase image sizeClick to decrease image size Acknowledgments Earlier versions of this article were presented at Tobin Project meetings on Sustainable National Security Strategy. Notes 1. Explained further in Jonathan Kirshner, American Power After the Financial Crisis (Ithaca: Cornell University Press, forthcoming.) 2. U.S. Government Accountability Office, “Financial Derivatives: Actions Needed to Protect the Financial System,” GAO/GGD-94-133, May 1994, pp. 11, 14–15, 39, 124, 126–7, www.gao.gov/assets/160/154342.pdf; Alan Greenspan, “The Regulation of OTC Derivatives,” testimony before the House Committee on Banking and Financial Services, July 24, 1998, www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm; Alan Greenspan, The Age of Turbulence (New York: Penguin Press, 2007): pp. 373–4. 3. Simon Johnson and James Kwak, 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown (New York, Pantheon, 2010), pp. 89, 91. 4. Greta R. Krippner, Capitalizing on Crisis: The Political Origins of the Rise of Finance, (Cambridge: Harvard University Press, 2011): pp. 28, 29, 39, 51; Johnson and Kwak, 13 Bankers. 5. See Carmen Reinhart and Kenneth Rogoff, This Time is Different: Eight Centuries of Financial Folly, (Princeton: Princeton University Press, 2009). 6. See Carmen Reinhart and Kenneth Rogoff, This Time is Different: Eight Centuries of Financial Folly, (Princeton: Princeton University Press, 2009). p. 155. 7. Nicholas D. Kristof and David Sanger, “How U.S. Wooed Asia to Let Cash Flow In,” The New York Times, February 16, 1999, http://www.nytimes.com/1999/02/16/world/how-us-wooed-asia-to-let-cash-flow-in.html?pagewanted=all&src=pm. 8. “International Capital Markets Charting a Steadier Course,” IMF Survey, September 23, 1996, http://www.imf.org/external/pubs/ft/survey/pdf/092396a.pdf. 9. Alan Greenspan, “The Current Asian Crisis,” testimony before the Senate Appropriations Committee, March 3, 1998; U.S. Treasury, “Deputy Secretary Summers Remarks Before the International Monetary Fund,” press release, March 9, 1998. 10. Sidney Weintraub, “Lessons from the Chile and Singapore Free Trade Agreements,” in Jeffrey Schott, ed., Free Trade Agreements: U.S. Strategies and Priorities, (Washington: Institute for International Economics, 2004): p. 87. 11. G. John Ikenberry and Charles Kupchan, “Socialization and Hegemonic Power,” International Organization 44, no. 3 (June 1990): 283–315. 12. Carl E. Walter and Fraser J. T. Howie, Red Capitalism: The Fragile Foundation of China's Extraordinary Rise, (Singapore: Wiley, 2011): pp. ix–x, 3; Rosemary Foot and Andrew Walter, China, The United States, and Global Order, (Cambridge: Cambridge University Press, 2011): pp. 117, 120, 123, 265–270; Gregory Chin and Eric Helleiner, “China as a Creditor: A Rising Financial Power?” Journal of International Affairs 62, no. 1 (Fall/Winter 2008): pp. 87 (quote), 92, 97–8, 99. 13. Li Ruogu, “The Financial Crisis and International Monetary System Reform,” China Finance 5, (2010); Li Daokui and Yin Xingzhong, “New Structure of the International Monetary System: Research on the Post-Financial Crisis Era,” Journal of Financial Research 2, (2010). 14. Zhou Xiaochuan, “Reform of the International Monetary System,” People's Bank of China, March 23, 2009; David Barboza, “China Urges New Money Reserve to Replace Dollar,” New York Times, March 24, 2009, http://www.nytimes.com/2009/03/24/world/asia/24china.html?_r=0; Gregory Chin and Wang Yong “Debating the International Currency System: What's in a Speech?” China Security 6, no. 1 (2010): pp 4, 5, 11, 12, p. 14 (quote); Zhang Yuyan, “Internationalization of the RMB: Endorse or Oppose,” International Economic Review 1, (2010); Zhang Ming, “Reform of the International Monetary System”; Zhang Yuyan and Zhang Jingchun, “International Currency's Costs and Benefits,” World Affairs 21, (2008). 15. Sebsatian Mallaby and Olin Wethington, “The Future of the Yuan: China's Struggle to Internationalize Its Currency,” Foreign Affairs 91, no. 1 (January/February 2012): pp. 136, 137; Jeffrey Frankel, “Historical Precedents for Internationalization of the RMB,” (Council on Foreign Relations, November 2011): p. 13. 16. Ming Zhang, “China's New International Financial Strategy amid the Global Financial Crisis,” China & World Economy 17, no. 5 (2009): pp. 23, 24, 27, 29, 31; Pieter Bottelier, “Future of the Renminbi as an International Currency,” ChinaUsfocus.com, April 29, 2011, http://www.chinausfocus.com/finance-economy/future-of-the-renminbi-as-an-international-currency/. 17. Chen Siqing, “Deeper-level Analysis of the Reasons for the U.S. Financial Crisis and Its Lessons for China's Banking Industry,” Studies of International Finance 12, (2008); Nancy Birdsall and Francis Fukuyama, “The Post-Washington Consensus: Development After the Crisis,” Foreign Affairs 90, no. 2 (March/April 2011): p. 3. 18. Edward Wong and Natasha Singer, “Currency Agreement for Japan and China,” New York Times December 27, 2011, http://www.nytimes.com/2011/12/27/business/global/china-and-japan-in-currency-agreement.html; “China and Australia in $31bn Currency Swap,” Financial Times, May 22, 2012, http://www.ft.com/intl/cms/s/0/4b6c4ab6-7404-11e1-bcec-00144feab49a.html#axzz2QeB9zdmx; “China and Brazil in $30bn Currency Swap Agreement,” BBC News, June 22 2012, http://www.bbc.co.uk/news/business-21949615. 19. Kosuke Takahashi, “Japan and China Bypass US in Direct Currency Trade,” The Asia–Pacific Journal 24, no. 3 (June 11 2012); Chin and Wang, “Debating the International Currency System,” p. 13. 20. The word “relative” is crucial. The most likely scenario is that the dollar will remain the world's most widely used international currency, with its use eroding to something like a “first among equals” status. But even that relative contraction in its international use will have consequences. 21. See Benjamin Cohen, “The Macrofoundations of Monetary Power,” in David M. Andrews, ed., International Monetary Power (Cornell University Press, 2006). 22. Susan Strange, “Finance, Information and Power,” Review of International Studies 16, no. 3 (July 1990): 259–74. 23. In theory, with floating rates, the “hangover” can be ignored and excess currency “mopped up” by depreciation. But in practice, states are very sensitive to sustained depreciations of their currencies, which threaten to snowball out of control. 24. Lewis Johnman, “Defending the Pound: The Economics of the Suez Crisis, 1956”, in Anthony Gorst, Lewis Johnman and W. Scott Lewis (eds.) Post-war Britain, 1945–64: Themes and Perspectives (London: Pinter Publishers, 1989); Howard J. Dooley, “Great Britain's ‘Last Battle’ in the Middle East: Notes on Cabinet Planning during the Suez Crisis of 1956,” International History Review 11, no. 3 (August 1989). 25. Jonathan Kirshner, Appeasing Bankers: Financial Caution on the Road to War, (Princeton: Princeton University Press, 2007). 26. H. Clark Johnson, Gold, France and the Great Depression, 1919–1932, (New Haven: Yale University Press, 1997); Kenneth Moure, The Gold Standard Illusion: France, The Bank of France, and the International Gold Standard, 1914–1939, (Oxford: Oxford University Press, 2002); Martin Wolfe, The French Franc Between the Wars 1919–1939, (New York: Columbia University Press, 1951): pp. 35, 83. 27. Kenneth Moure, Managing the Franc Poincaré: Economic Understanding and Political Constraint in French Monetary Policy, 1928–1936, (Cambridge: Cambridge University Press, 1991): pp. 17–18; 22, 27, 121; Barry Posen, The Sources of Military Doctrine: France, Britain and Germany Between the World Wars, (Ithaca: Cornell University Press, 1984): p. 20; Robert Murray Haig, “The National Budgets of France, 1928–1937,” Proceedings of the Academy of Political Science 17, no. 4 (1938): pp. 26, 29; Talbot Imlay, Facing the Second World War: Strategy, Politics and Economics in Britain and France 1938–1940, (Oxford: Oxford University Press, 2003): p. 25; Bradford Lee, “Strategy, Arms, and the Collapse of France 1930–40”, in Richard Langhorne (ed.) Diplomacy and Intelligence during the Second World War, (Cambridge: Cambridge University Press, 1985): pp. 59, 63, 64, 65. 28. James Thomas Emmerson, The Rhineland Crisis, 7 March 1936: A Study in Multilateral Diplomacy, (Ames: Iowa State University Press, 1977), p. 78; Stephen Schuker, “France and the Remilitarization of the Rhineland, 1936,” French Historical Studies 14, no. 3 (Spring 1936), pp. 304, 330, 334, 335. 29. Daniel Drezner, “Bad Debts: Assessing China's Financial Influence in Great Power Politics,” International Security 34, no. 2 (2009). Additional informationNotes on contributorsJonathan KirshnerJonathan Kirshner is Stephen and Barbara Friedman Professor of International Political Economy at Cornell University, 2012–2013 World Politics Visiting Fellow at Princeton University, and author of American Power After the Financial Crisis (Ithaca: Cornell University Press, forthcoming)

I take it for granted that neither economists nor political scientists can assume without qualification that the first election returns in two countries after they have been ravaged by war really reflect a considered judgment of the role that central banks can or will play in the future. The mere decision to nationalize, in itself, settles little save, perhaps, a real or fancied grievance. The acts nationalizing the Bank of England and the Bank of France can be analyzed most fruitfully not as isolated fragments of history nor even as harbingers of immediate changes in monetary policies but as reflections of changes in the basic attitudes of the British and French people toward the role that the government should play in economic affairs.' For more than a century before the Great Depression a state bank would have been as incongruous in France or the United Kingdom as a private independent central bank would be in the Soviet Union. The predominant view in both countries had long been that the government should keep its activity in economic and business affairs at a minimum. One facet of this liberal tradition was that the government should not interfere in the management of the central bank. A wholly consistent advocate of laissez-faire, of course, would have opposed establishment of a central bank with unique monetary powers and privileges. Instead he would have urged that people be free to establish banks and would have relied on competition among many banks to regulate money and credit. The most ardent and consistent advocates of the doctrine held this view, and the relative merits of central banking and free competitive banking were discussed at