Niall Ferguson

The Empire Effect: The Determinants of Country Risk in the First Age of Globalization, 1880-1913

This paper reassesses the importance of colonial status to investors before 1914 by means of multivariable regression analysis of the data available to contemporaries. We show that British colonies were able to borrow in London at significantly lower rates of interest than non-colonies precisely because of their colonial status, which mattered more than either gold convertibility or a balanced budget. Allowing for differences not only in monetary and fiscal policy but also in economic development and location, the â¬SEmpire effectâ¬? was a discount of around 100 basis points. We conclude that investors saw colonial status as a no-default guarantee.

The End of Chimerica

For the better part of the past decade, the world economy has been dominated by a world economic order that combined Chinese export-led development with US over-consumption. The financial crisis of 2007-2009 likely marks the beginning of the end of the Chimerican relationship. In this paper we look at this era as economic historians, trying to set events in a longer-term perspective. In some ways Chinas economic model in the decade 1998-2007 was similar to the one adopted by West Germany and Japan after World War II. Trade surpluses with the U.S. played a major role in propelling growth. But there were two key differences. First, the scale of Chinese currency intervention was without precedent, as were the resulting distortions of the world economy. Second, the Chinese have so far resisted the kind of currency appreciation to which West Germany and Japan consented. We conclude that Chimerica cannot persist for much longer in its present form. As in the 1970s, sizeable changes in exchange rates are needed to rebalance the world economy. A continuation of Chimerica at a time of dollar devaluation would give rise to new and dangerous distortions in the global economy.

Illusions of Empire: Defining the New American Order

Colossus: The Price ofAmericas Empire. BY NIALL FERGUSON. New York: Penguin Press, 2004, 368 pp.

The House of Rothschild: The World's Banker, 1849-1999

25.95. Fears Empire: War, Terrorism, and Democracy. BY BENJAMIN R. BARBER. New York: Norton, 2003, 192 pp.

Earning from History?: Financial Markets and the Approach of World Wars

23.95. Incoherent Empire. BY MICHAEL MANN. New York: Verso, 2003, 284 pp.

Siegmund Warburg, the City of London and the financial roots of European integration

25.00. After the Empire: The Breakdown of the American Order. BY EMMANUEL TODD. New York: Columbia University Press, 2003, 192 pp.

Benedetto Cotrugli, Book of the Art of Trade (Libro del’arte dela mercatura)

29.95.

Comment on Fisman and Werker's 'Local Company Politics: A Proposal'

It’s an irresistible combination: the world’s favourite financial historian lays bare the secrets of the world’s most iconic financial dynasty; Niall Ferguson and the Rothschilds; unique access to the financial accounts and also to the private correspondence that bound the fraternal volley of five arrows launched by Mayer Amschel Rothschild from the Frankfurt ghetto at the turn of the nineteenth century; and money, power, recurrent racism and intrigue.

The Ascent of Money: A Financial History of the World

Are world financial markets paying due heed to geopolitical risk? Despite unchallenged U.S. military supremacy, the financial consequences of a terrorist nuclear strike, or war in the Middle East or the Taiwan Strait—or some totally unforeseen conflict—could still be enormous. That globalization under a powerful hegemon has strengthened linkages among national economies may not rule out another major war: such linkages were also strong on the eve of World War I, which thus caught investors off guard. Investors try to learn from history, but the very different financial impacts of the two world wars and the Cold War reveal the tendency of military technology and regulatory regimes to shift significantly, reducing the relevance of past experience. Any lessons investors might take from the last war could have limited relevance for the next—or be forgotten after a generation of relative peace has led to complacency.

Empire: The Rise and Demise of the British World Order and the Lessons for Global Power

The process of European economic integration slackened in the 1960s. National markets for goods, most services and labour were not being integrated because they were not really being liberalised. The exception to this rule was financial services, one of which – the sale of long-term corporate and public sector bonds to relatively wealthy investors – became integrated in a quite novel way in the course of the 1960s. The rise of the so-called ‘Eurobond’ market was a major breakthrough in the history of European integration but it was a largely spontaneous result of innovation by private sector actors, led by Siegmund Warburg. In some measure, no doubt, the bankers’ primary motive was the profit motive. Yet there is also compelling evidence that Warburg and his associates also had a political agenda. They regarded it not only as a way of making money, but also as a potent device for advancing Europes political integration. In particular, they appreciated that European capital market integration could reinforce the case for British membership of the EEC. The resurrection of London as Europes principal financial centre, even at a time of economic and exchange rate weakness, was a major achievement in its own right. But it was also a crucial for the resumption of European integration in the 1970s.