Attilio Cabiati, un economista liberale di fronte al crollo dell’ordine economico internazionale (Attilio Cabiati: a liberal economist's analysis of the crash of the international economic order between the two world wars)

Attilio Cabiati was the economist of the Turinese School of economics who made the most e?ort to analyse the crisis of the international monetary system between the two world wars. Cabiati’s analysis is founded on two concepts of monetary regimes: a good and a bad currency system. A good system has the gold standard as its model. A bad currency system is one that involves the (partial) autonomy of a country’s currency from the international monetary market. Consequently, a country’s government can arbitrarily vary the quantity of money in circulation. The basic characteristic of a bad currency system is the instability of its equilibrium. This stems from the constant and widespread foreign exchange speculation that takes place because of the way economic agents act when there is no ?xed unity value in the international exchanges. Cabiati uses the two models in order to analyse the international monetary system in the twenties and thirties. In particular, the paper reconstructs Cabiati’s analysis of the return to gold, the de?ationary crisis (1929-1931), the gold sterilization and its e?ect on the gold standard system, and the American experience of managed currency under Roosevelt. According to Cabiati, the basic cause of the long-time crisis in the international economic system is that the gold standard could not work fully and that no agreement could be reached for re-establishing international economic order due to English economic weakness and American isolationism.