Charles Kindleberger (1910-2003), the dollar system, and financial crises

Prochain séminaire “théories et pratiques du smi: continuité et ruptures” de PHARE : Vendredi 28 mars prochain, à la MSE, salle 115, de 17H 30 à 19H :

Laurent Le Maux (université de Brest) fera un exposé sur le thème

“Charles Kindleberger, the dollar system, and financial crises”.

lien zoom:

https://pantheonsorbonne.zoom.us/j/95125001888?pwd=vCuaK59ayyMrqfPshPpd…

Abstract
When Ben Bernanke, Chairman of the Board of the Federal Reserve, opened the September 16, 2008 meeting of the Federal Open Market Committee in the wake of the collapse of Lehman Brothers, he tabled a new procedure for liquidity provision. It concerned the Dollar Swap Lines program allowing the Federal Reserve to grant credit facilities to other central banks and the proposal was to transform the Dollar Swap Lines procedure in such a way that the quantity of dollars provided would henceforth be unlimited, for a given interest rate. Without knowing it, Ben Bernanke and the staff of the New York Federal Bank were proposing to implement the rule that Charles Kindleberger had enunciated thirty years earlier in the final pages of his book Manias, Panics, and Crashes. More generally, the global financial crisis of 2007–2009 illustrated Kindleberger’s analysis of nearly half a century of research into international monetary and financial economics. This has received little attention in the literature on financial crises. Perry Mehrling’s Money and Empire: Charles P. Kindleberger and the Dollar System (Cambridge University Press, 2022) contributes to righting this state of affairs. This paper reviews Perry Mehrling’s book. Furthermore, in order to understand the substance of the 1982 correspondence between Charles Kindleberger and Ben Bernanke that Perry Mehrling posted on the INET website (2022), this paper examines the theory of each of the two authors, in particular concerning financial crises.