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Architects of AusterityInternational Finance and the Politics of Growth$
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Aaron Major

Print publication date: 2014

Print ISBN-13: 9780804788342

Published to Stanford Scholarship Online: September 2014

DOI: 10.11126/stanford/9780804788342.001.0001

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The Architects of Austerity

The Architects of Austerity

(p.23) 2 The Architects of Austerity
Architects of Austerity

Aaron Major

Stanford University Press

This chapter develops a historical account of the emergence of an international architecture of austerity in the late Bretton Woods era. These developments were critical for redistributing international monetary power toward central banks and finance ministries. North American and Western European governments reduced controls over capital movements in the late 1950s that, in turn, exposed real weaknesses and limitations to the extant mechanisms for dealing with balance of payments imbalances and speculative attacks on national currencies. Into these institutional gaps stepped the state monetary authorities that developed a network of cooperative arrangements to try and manage the exchange markets. Through these institutional transformations national governments became financially dependent on active cooperation from central banks to protect their currencies from financial speculation.

Keywords:   gold standard, Bretton Woods, international finance, international monetary system, gold pool, currency swaps, central bank cooperation

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