The two volumes of Good Money concentrate on Hayek's work on money and monetary policy. Published in the centenary of his birth, these volumes bring forth some of the economist's most distinguished articles on monetary policy and offer another vital addition to the collection of Hayek's life work.

Good Money, Part I: The New World includes seven of Hayek's articles from the 1920s that were written largely in reaction to the work of Irving Fisher and W. C. Mitchell. Hayek encountered Fisher's work on the quantity theory of money and Mitchell's studies on business cycles during a U.S. visit in 1923-24. These articles attack the idea that price stabilization was consistent with the stabilization of foreign exchange and foreshadow Hayek's general critique that the whole of an economy is not simply the sum of its parts.

Good Money, Part II: The Standard offers five more of Hayek's articles that advance his ideas about money. In these essays, Hayek investigates the consequences of the "predicament of composition." This principle works on the premise that the entire society cannot simultaneously increase liquidity by selling property or services for cash. This analysis led Hayek to make what was perhaps his most controversial proposal: that governments should be denied a monopoly on the coining of money.

Taken together, these volumes present a comprehensive chronicle of Hayek's writings on monetary policy and offer readers an invaluable reference to some of his most profound thoughts about money.

"Each new addition to The Collected Works of F. A. Hayek, the University of Chicago's painstaking series of reissues and collections, is a gem."— Liberty on Volume IX of The Collected Works of F. A. Hayek

"Intellectually [Hayek] towers like a giant oak in a forest of saplings."—Chicago Tribune

"One of the great thinkers of our age who . . . revolutionized the world's intellectual and political life."—Former President George Herbert Walker Bush

The imbalanced, yet mutually beneficial, trading relationship between the United States and Asia has long been one of international finance’s most perplexing mysteries. Although the United States continues to post a substantial trade deficit—and China reaps the benefits of a surplus—the dollar has yet to sink in the face of ever-increasing account disparities.  International Financial Issues in the Pacific Rim explains why the United States enjoys a seemingly symbiotic relationship with its trading partners despite stark inequities in the trade balance, especially with Asia. This timely and well-informed study also debunks the assumed link between economic openness and low inflation in the region, identifies the serious gap between academic and private-sector researchers’ understanding of exchange rate volatility, and analyzes the liberalization of Asian capital accounts. International Financial Issues in the Pacific Rim will have broad implications for global trade and economic policy issues in Asia and beyond.

 

 

A single currency--and the necessary prior condition of exchange rate cooperation and the stabilization of exchange rates--has been an elusive goal of many European leaders for more than twenty years. While much of the literature on exchange rate cooperation within the European Union focuses on the integration of national economies as the driving force, Thomas Oatley draws on public choice models to develop an explanation of exchange rate cooperation based on domestic politics. The author then tests hypotheses derived from this model in a detailed consideration of the various efforts to stabilize currencies since the 1970s. Oatley argues that monetary policy has distributional effects and is used by policy makers to achieve domestic policy goals. Thus domestic politics plays an important role in defining the approach leaders take to monetary integration. Oatley suggests that leaders supported the creation of the European Monetary System because governments saw a link to the Bundesbank as a useful instrument to help slow the growth of wages, redistribute income from labor to capital, and achieve domestic stabilization. The later collapse of the System reflected the unwillingness on the part of many leaders to continue to follow the Bundesbank's lead as well as the Bundesbank's own reservations about monetary integration.
Given the rising strife in countries such as France over the domestic costs of monetary integration, Oatley's domestic politics explanation will be useful in understanding the continued efforts of European policy makers to work towards an integrated currency. This book should appeal to political scientists and economists interested in international cooperation, the European Union and exchange rate systems.
Thomas Oatley is Assistant Professor of Political Science, University of North Carolina.