Category Archives: Financial History

Piece in The Economist about the economic history of the Great Depression

“Perhaps economic historians can make a better contribution by ensuring the past is not abused in debates about modern-day crises. For instance, putting all the blame on Wall Street for the Great Depression—or on bankers in the current crisis—does not stand up to historical scrutiny. The responsibility may more properly lie in a complex combination of factors, like how global financial systems are structured. But this still needs be interpreted from modern day evidence rather than in over-simplistic “lessons” from the past. As the Irish economic historian Cormac Ó Gráda once wrote, “shattering dangerous myths about the past is the historian’s social responsibility”. Such sentiments should apply to the Great Depression as much as they do any other episode in history.”

Estimados colegas,

Por este medio les hacemos llegar una copia digital de un artículo publicado en el blog "Free Exchange" de la revista The Economist sobre la historia económica de la Gran Depresión.

Saludos cordiales,

Manuel Bautista,

Vocal de la mesa directiva de la AMHE, 2013-2016


C., R. (2013), ‘Economic history. What can we learn from the Great Depression?’, Free Exchange (2013; London: The Economist). Accessed November 16 2013. <>


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Martin Wolf on what we should teach students on banking, credit and money

Standard undergraduate textbooks express the following views on credit, money and banking: banks borrow money from savers, which they then lend out; banks lend to businesses to fund investment and working capital, for productive purposes; and the liabilities of banks are “money” for which one can define a stable demand function, with income and the rate of interest as independent variables.This picture is almost entirely misleading. First, banking institutions create credit and so both purchasing power and money. Second, credit does not mainly finance investment, but now has a bigger role in financing the purchase of existing assets. Third, the credit and debt are more important than “money”, because they determine the fragility of the economy and so its vulnerability to crises.The oversimplified view is not just a feature of elementary textbooks. Even advanced macroeconomic textbooks are largely silent on the way banks create credit and money. Even Michael Woodford’s “Interest and Prices”, a defining statement of new Kenyesian macroeconomics, ignores the structure and role of the financial system.

via Martin Wolf: Banking, credit and money | INET CORE Project.

“A fluid, ever-evolving, and organic process of improvement, misstep and improvement”: The Long Road to Monetary Union in the USA

A piece on the monetary unification in the United States.

The NEP-HIS Blog

Politics on the Road to the U. S. Monetary Union

Peter L. Rousseau (, Vanderbilt University


Abstract: Is political unity a necessary condition for a successful monetary union? The early United States seems a leading example of this principle. But the view is misleadingly simple. I review the historical record and uncover signs that the United States did not achieve a stable monetary union, at least if measured by a uniform currency and adequate safeguards against systemic risk, until well after the Civil War and probably not until the founding of the Federal Reserve. Political change and shifting policy positions end up as key factors in shaping the monetary union that did ultimately emerge.

Review by Manuel Bautista Gonzalez

In this piece published in NEP-HIS 2013-04-13, Peter Rousseau argues for the need to complicate the widely-held, simplistic view that political union is a necessary condition for…

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Mexican Silver in China, 19th century

On Chinese Monetary History, 1800-1949

The NEP-HIS Blog

Money and Monetary System in China in the 19th-20th Century: An Overview
Debin Ma (, Department of Economic History, London School of Economics (Great Britain)


Abstract: This article provides an historical overview on the development of Chinese money and monetary regimes between about 1800 and 1950. It develops a simple conceptual framework based on the relative costs of assessing the inherent value of the currencies of different denomination. Based on this framework, I develop a historical narrative that ties important political and institutional changes with the evolving structural changes in the Chinese monetary regime marked by the vicissitudes in the use of copper, silver currencies and paper money in both the private and public financial sectors from the Opium War in mid-19th century to the end of the Civil War in the 1950s.

Review by Manuel Bautista González

China was the first country to have coins, or the first along with Lydia in…

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The Challenges of International Economic Multilateralism

On International Policy Coordination

The NEP-HIS Blog

International Policy Coordination: The Long View

Barry Eichengreen (, University of California at Berkeley (United States)


Abstract: This paper places current efforts at international economic policy coordination in historical perspective. It argues that successful cooperation is most likely in four sets of circumstances. First, when it centers on technical issues. Second, when cooperation is institutionalized – when procedures and precedents create presumptions about the appropriate conduct of policy and reduce the transactions costs of reaching an agreement. Third, when it is concerned with preserving an existing set of policies and behaviors (when it is concerned with preserving a policy regime). Fourth, when it occurs in the context of broad comity among nations. These points are elaborated through a review of 150 years of historical experience and then used to assess the scope for cooperative responses to the current economic crisis.

Review by:Manuel Bautista González


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Is Money Substitutive or Complementary? East Asian Monetary History in Global Perspective

Until the late 19th century nine out of ten humans across the world made use of multiple systems of money in everyday life. The importance of small denomination coinage, the imaginary usage of silver by weight, and the prevalence of local paper monies in East Asia show that, depending on the situation, money worked in complementary ways rather than substitutive. Economists, anthropologist, numismatist and historians, whose research covers Asia, Africa, the Americas and Europe will discuss this issue and help to explore why it is that a single unified currency cannot ever dominate the entire world.

via CEAS | Events.

Some words on Temin

Temin’s lectures on the Great Depression, delivered in the London School of Economics in the late 1980s, provide a more updated state of the question regarding the explanation of the causes of the Great Depression. I thought it is also necessary to place it in the context of the larger theoretical debates of the time in macroeconomic theory and policy. Temin’s aim is to show that proactive “macroeconomic policy matters” (p. 37), in opposition to both monetarists proposing a set of rules limiting the capabilities of monetary and fiscal authorities (i. e., the monetary growth rule and a balanced budget) and scholars of rational expectations, who came to advance the idea that the public knows better than any authority and that any surprises will only destabilize the economy.

Temin advanced the strains suffered by the international monetary system (i. e. the gold standard) after World War I as the explanation of the ultimate origin of the Great Depression. To account for the length of the Depression, he advances the difficulty for policymakers to break with the intellectual consensus of the age, namely the convenience of the gold standard as an international payments mechanism. This might seem an excessively “top-down” explanation of the length of the problem, but then we should discuss degrees of agency of our different historical actors, for fiscal and monetary authorities were in a privileged position then (as they are now) to mitigate, if not alleviate the problems affecting any economy.

The Network of Global Corporate Control

The Network of Global Corporate Control

In detail, nearly 4/10 of the control over the economic value of transnational corporations (TNCs) in the world is held, via a complicated web of ownership relations, by a group of 147 TNCs in the core, which has almost full control over itself. The top holders within the core can thus be thought of as an economic “super-entity” in the global network of corporations. A relevant additional fact at this point is that 75% of the core are financial intermediaries.”

via PLoS ONE: The Network of Global Corporate Control.

The Public and the Private in American Banking

In effect, JPMorgan Chase operates with the implicit backing of the United States government – primarily in the form of actual and potential access to borrowing from the Federal Reserve, with the implication that the Treasury could also provide support. Being effectively backed by the full faith and credit of the government is a great help; it lowers a bank’s funding costs because it reduces the risk to creditors. JPMorgan Chase and the other big banks in the American economy are effectively government-sponsored (and subsidized) enterprises.

via The Need For An Independent Investigation Into JP Morgan Chase | The Baseline Scenario.

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