Global Money Politics

Money politicsThe international monetary and financial system plays an extremely important role in the world economy by facilitating economic exchange and regulating the flow of capital and credit.

International monetary and financial relations have become increasingly unstable since the demise of the Bretton Woods system in the 1970s and the subsequent dismantling of capital controls and integration of financial markets.

Financial globalization enabled the widening of macroeconomic imbalances that were a structural cause of the global financial crisis of 2007-9 and the Eurozone debt crisis of 2010-15 – two interlinked crises that have fundamentally changed the nature of global money politics and will continue to shape it for the foreseeable future.

These macroeconomic imbalances reflect three features of international monetary and financial relations that are the topic of past and ongoing research at the GIIS.

First, there is a deep intertwinement between international finance and varieties of capitalism: macroeconomic imbalances resulted from the formation of mutually dependent but ultimately unsustainable debt-led and export-led growth regimes adopted by diverging models of capitalism. ``

Second, the international monetary and financial system is intrinsically hierarchical and perpetuates asymmetrical relations of power, as reflected by the resilience of the US dollar as the world’s international currency and the persistently subordinate position of emerging market and developing countries.

Third, politically independent central banks have occupied an increasingly central position in macroeconomic governance since the global financial crisis, with economic growth in most advanced capitalist countries becoming excessively dependent on expansionary monetary policy measures at the expense of creating new macroeconomic imbalances.

 

Concretely, the GIIS focuses on the following research topics:

  • Political causes and consequences of the global financial crisis and Eurozone debt crisis
  • International monetary and financial relations between varieties of capitalism
  • The political economy of macroeconomic imbalances and adjustment
  • The political economy of international currency leadership and competition
  • Rising powers and global monetary relations
  • The changing role of monetary policy in macroeconomic governance