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

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  • Flores Zendejas, Juan
  • Nodari, Gianandrea

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.

Suggested Citation

  • Flores Zendejas, Juan & Nodari, Gianandrea, 2025. "Globalization 2.0: The Geopolitics of the US Exchange Stabilization Fund, 1934-1945," Working Papers unige:185041, University of Geneva, Paul Bairoch Institute of Economic History.
    • Handle: RePEc:gnv:wpaper:unige:185041
    as

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    References listed on IDEAS

    as
    1. David S. Jacks & Dennis Novy, 2020. "Trade Blocs and Trade Wars during the Interwar Period," Asian Economic Policy Review, Japan Center for Economic Research, vol. 15(1), pages 119-136, January.
    2. Becker,William H. & McClenahan, Jr,William M., 2003. "The Market, the State, and the Export-Import Bank of the United States, 1934–2000," Cambridge Books, Cambridge University Press, number 9780521811439, June.
    3. Ponticelli, Jacopo & Voth, Hans-Joachim, 2020. "Austerity and anarchy: Budget cuts and social unrest in Europe, 1919–2008," Journal of Comparative Economics, Elsevier, vol. 48(1), pages 1-19.
    4. Jonas Ljungberg & Anders Ögren, 2022. "Discipline or international balance: the choice of monetary systems in Europe," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 29(2), pages 218-245, March.
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    More about this item

    Keywords

    Economic fragmentation; Great depression; Geopolitical competition; Currency crises; Dollar diplomacy;
    All these keywords.

    JEL classification:

    • N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean
    • N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-
    • N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean
    • F15 - International Economics - - Trade - - - Economic Integration
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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