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Published: 17th July 2012

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Why have the efforts of governments and central banks to revive economic growth and solve the problems left by the global financial crisis met with such limited success? Why have markets been periodically paralysed by fear and uncertainty? This book argues that governments have been using the wrong policy weapons. They have relied on the traditional tools of low interest rates and monetary ease, plus tighter bank regulation and new macro-prudential toolkits. The Money Trap discusses how governments have failed to understand the roots of the rolling crisis and recession of 2007-12 and argue that these roots lie in the interaction of an elastic credit supply, dysfunctional banking systems and an unreformed international monetary system. Historically, the advanced countries enjoyed long periods of economic growth with stable money and without systemic banking crises - and minimal bank supervision. We can learn from the historical experience, and from the teaching of great economists. They point to a clear conclusion. A root-and-branch reform both of banking and of international money is required. The centrepiece of such a reform should be the re-establishment of a trusted international monetary standard. This book brings together the main strands of the current policy-oriented discussions and analyses the solutions, providing readers with an integrated guide and analysis to the events in the four years after 2007, and their antecedents in the development of the system since the early 1970s, drawing on Pringle's extensive contacts and work as a leading economics editor over the past 40 years.

The Money Trap looks deeply at the fundamental problems of reforming the international monetary system. Since the end of Bretton Woods, the world economy has not had rules that guided markets toward an efficient equilibrium that benefitted large and small countries. Pringle shows why current international arrangements repeatedly bring crises. Allan Meltzer, University Professor of Political Economy, Carnegie Mellon University, Pittsburgh In this lucidly written and wide-ranging treatment of the global financial crisis, Robert Pringle traces the modern historical origins of the crisis and draws together many elements of the story. Among the scores of books on the crisis, this one stands out for the accessibility of the account and the clear proposals it advances. It will be read with profit by all manner of practitioners and commentators. Forrest Capie, Professor Emeritus in Economic History, CASS Business School, London The Money Trap embodies an original, ambitious, bold, and provocative approach to the subject of the crisis and the monetary system...A valuable addition to the literature available for policy makers, analysts, academics and participants in financial markets. Dr Y V Reddy Former Governor, Reserve Bank of India This work is probably the most ambitious - and also relevant - attempt to explain the set of causes that led to the disasters of 2007 and following years. It proposes solutions based on economic literature and on the personal views of an author who has devoted most of his career to this fundamental subject. The analysis is fundamental not only for specialists but, more importantly, also for our society. It is a book that should be read by government officials, economists, students and citizens. Jacques de Larosiere, Managing Director of the International Monetary Fund (1978-87), Governor of the Banque de France (1987-93) It is always very important to review history, particularly the history of past mistakes. By doing that, we can see how we should behave in the future when similar crises hit us. Robert Pringle's book does exactly that. It contributes greatly to our understanding of the present international financial system. Eisuke Sakakibara, Professor of Waseda University, Tokyo Former Vice Minister of Finance and International Affairs of Japan This book cuts through all the carping and obfuscation to pinpoint the biggest burden on business enterprise: the lack of reliable money. Graham Bannock Co-author (with R.E.Baxter), The Palgrave Encyclopedia of World Economic History URL www.themoneytrap.com

ISBN: 9780230392748
ISBN-10: 0230392741
Audience: Professional
Format: Hardcover
Language: English
Number Of Pages: 328
Published: 17th July 2012
Dimensions (cm): 22.2 x 14.6  x 2.4
Weight (kg): 0.531