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Monetary Policy Cooperation/Coordination and Global Financial Crises in Historical Perspective

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  • Michael David Bordo

    (University of Chicago
    Rutgers University
    National Bureau of Economic Research,Distinguished Visiting Fellow, Hoover Institution, Stanford University)

Abstract

The Covid 19 pandemic spawned a global liquidity crisis in March 2020. The global liquidity crisis was alleviated by the Federal Reserve and other advanced country central banks cooperating by extending the swap lines they developed in the Global Financial Crisis 2007–2008. Central bank cooperation in 2020 evolved from a two-century history across several monetary regimes that is surveyed in this paper. I find that in monetary regimes which are rules-based cooperation was most successful. International currency swaps developed to manage exchange rates during the Bretton Woods era have evolved into the leading tool to manage international liquidity crises. The swap network can be viewed as a step in the direction of a global financial safety net.

Suggested Citation

  • Michael David Bordo, 2021. "Monetary Policy Cooperation/Coordination and Global Financial Crises in Historical Perspective," Open Economies Review, Springer, vol. 32(3), pages 587-611, July.
    • Handle: RePEc:kap:openec:v:32:y:2021:i:3:d:10.1007_s11079-020-09611-5
    DOI: 10.1007/s11079-020-09611-5
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    References listed on IDEAS

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    1. Stefan Goldbach & Volker Nitsch, 2022. "Covid-19 and Capital Flows: The Responses of Investors to the Responses of Governments," Open Economies Review, Springer, vol. 33(4), pages 751-774, September.

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