The interwar international monetary disorder: an international political economy approach

The lack of cooperation between central banks is the most widely accepted interpretation of the collapse of the gold-exchange standard. This explanation does not take account of the evolution of systems of payment: national commodity moneys were progressively replaced by fiduciary money. These changes were incompatible with the functioning of the classical gold standard. There was need, also at the international level, of greater elasticity of money supply. The gold-exchange standard was such an attempt. However, an international convertible money, to be accepted, presupposes the existence of an institutional framework that guarantees its value. This can only occur under certain conditions. The prevalence of a multilateral equilibrium in international relations impeded the existence of an international money with a high level of fiduciary content.