Europe and the Dollar brings together the contributions of two decades of professional reflection on the central themes of international finance between the developed countries: the dollar, European currencies, world liquidity, and balance-of-payments adjustments. Throughout this quarter century these essays have reflected certain consistent themes: the importance of supply; the need for international cooperation under any and all systems; the superiority of unwritten to formal constitutions in institutional machinery in a world of change with no consensus; the unimportance of the quantity of international liquidity. The papers and memoranda included in this book are arranged in reverse chronological order from 1965 to 1939, a period characterized in the late 1930's by a dollar shortage and at its ending in the mid-1960s with a dollar surfeit.
A number of the papers have previously been translated for publication abroad, but will appear for the first time in English. Some have been published in symposia and are therefore difficult to access. Two of the latest papers have aroused considerable interest, if not controversy; they are on integration of capital markets in Europe, and on balance-of-payments definitions and the international market in liquidity. The latter represents a distinctive interpretation of the balance-of-payments deficit of the United States, at variance with official views in the United States and Europe, but which has been found highly suggestive by academic economists in that it applies the theory of financial intermediation developed by Gurley and Shaw for domestic markets to international financial transactions.
These essays will be valuable to teachers and students of international finance as well as to all those involved in the world of finance: banks, central bankers, government treasuries, and, of course, all those already familiar with Kindleberger's writings.
