Globalization 2.0: The Geopolitics of the US Exchange Stabilization Fund, 1934-1945

Juan Flores Zendejas and Gianandrea Nodari

No unige:185041, Working Papers from University of Geneva, Paul Bairoch Institute of Economic History

Abstract: This paper adopts a historical perspective to examine the geopolitical dimensions of monetary policy, focusing on the 1930s. During this period, Stabilization Funds were established to promote exchange rate stability as nations abandoned the gold exchange standard. These entities intervened in foreign exchange markets and extended stabilization loans to other countries. This article analyzes the experience of the U.S. Exchange Stabilization Fund (ESF), situating it within the broader context of global economic fragmentation and the formation of currency blocs. The analysis reveals that rivalries with foreign powers significantly influenced the outcomes of these loans, and the political conditions attached to them delineated the boundaries of the expanding "dollar bloc." The U.S. ESF emerged as a pivotal instrument, enabling the United States to secure trade markets while bolstering the war efforts of allied nations.

Keywords: Economic fragmentation; Great depression; Geopolitical competition; Currency crises; Dollar diplomacy (search for similar items in EconPapers)
JEL-codes: F15 F34 F36 F53 N16 N22 N26 (search for similar items in EconPapers)
Pages: 26
Date: 2025
New Economics Papers: this item is included in nep-his and nep-mon
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