This paper studies the impact of financial crises on society. Using data on 187 banking crises in 126 countries over the period 1970-2009, I examine the impact of a crisis not only on the economy and the financial sector, but also on health, education, poverty, and gender issues. A wider-angle...

Economists in the public are accused of propagating highly professional, but unrealistic theories that mislead market agents and policy makers to place too much confidence in rational behaviour and market equilibrium. The paper analyses to what extent the US banking crisis and the euro crisis...

We develop a simple model that highlights the costs and benefits of fixed exchange rates as they relate to trade, and show that negative export-price shocks reduce fiscal revenue and increase the likelihood of an expected currency devaluation. Using a new high-frequency data set on...

This paper assesses whether the international monetary system is already tripolar and centred around the US dollar, the euro and the Chinese renminbi (RMB). It focuses on what we call China’s “dominance hypothesis”, i.e. whether the renminbi is already the dominant currency in Asia,...

We use the demise of silver-based standards in the 19th century to explore price dynamics when a commodity-based money ceases to function as a global unit of account. We develop a general equilibrium model of the global economy with gold and silver money. Calibration of the model shows that...

The emergence of the gold standard has for a long time been viewed as inevitable. Fluctuations of the gold-silver exchange rate in world markets were accused to lead to brutal and unsustainable switches of bimetallic countries' money supplies. However, more recent work has shown that the option...

In earlier times, societies relied extensively on "IOUs" ("I owe you") to avert the need for settlement in specie. However, an IOU reliant economy is complex and fraught with financial stability risks. These problems can be overcome through clearing, netting and settlement, either without or...

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...

The interwar gold standard is long thought to have prevented central bankers from running an independent monetary policy, forcing governments to leave this fixed exchange rate system in order to take control over domestic policy. But our study of the day-to-day management of monetary policy in...

The emergence of the gold standard has for a long time been viewed as inevitable. Fluctuations of the gold-silver exchange rate in world markets were accused to lead to brutal and unsustainable switches of bimetallic countries' money supplies. However, more recent work has shown that the option...