History as a warning system
Feb 2026
Thought Supply
Institutions, stability, and the lessons of history
In the latest Thought Supply, recorded at the sidelines of the UBS Center Forum on global trade in crisis in Zurich, economic historian Barry Eichengreen explains why history is not a closed chapter, but a tool for diagnosing today’s economic and political risks. Speaking with Maya Eden, he connects the Great Depression to current challenges, from the global role of the US dollar to the resilience of central banks and democratic institutions.
Eichengreen uses the Great Depression as a reference point, not for historical nostalgia, but to show how crises unfold and how they can be prolonged. Markets, he argues, are not automatically self-stabilizing. Institutions and policy choices matter. Monetary tightening, premature fiscal restraint, and weak international coordination turned a severe downturn into a long-lasting crisis in the 1930s.
The parallels to today are hard to miss. Debates about debt brakes, fiscal discipline, central bank independence, and global coordination echo the same tensions. The key takeaway: economic progress is not guaranteed. When institutions weaken, even advanced economies become vulnerable.
From economic shock to democratic strain
Eichengreen warns that economic instability can spill over into democratic institutions. He points to growing pressure on the rule of law, the politicization of independent bodies such as central banks and courts, and declining trust in government, science, and the media.
His message is restrained but clear: economic stability depends on professional, rules-based institutions. When these “quiet safeguards” come under pressure, economic and political crises can reinforce each other.
Money, power, and the dollar
Eichengreen then turns to the international monetary system. The US dollar remains dominant, but its safe-haven status has been damaged. Central banks are exploring alternatives – the euro, the renminbi, gold, cryptocurrencies, and central bank digital currencies – but none can fully replace the dollar.
Why? Because global currencies are not just economic instruments. They rest on political systems, legal certainty, and geopolitical trust. In an era of sanctions, financial weaponization, and geopolitical fragmentation, this political dimension has become central.
Switzerland and Europe: strong, but limited
Switzerland enters the discussion as a case of exceptional stability and governance. The Swiss franc benefits from this credibility, but Eichengreen is blunt: Switzerland is too small to play a systemic global role. Europe has greater potential, yet remains constrained by incomplete integration, especially in capital markets and fiscal capacity. Stability alone, he concludes, is not enough. Scale and political coherence matter.
Institutions, stability, and the lessons of history
This Thought Supply stands out because it connects historical insight with urgent contemporary questions. It highlights institutional stability as an often-overlooked foundation of prosperity, clarifies global money debates, and reflects on the responsibility of economists to engage with the public.
In the latest Thought Supply, recorded at the sidelines of the UBS Center Forum on global trade in crisis in Zurich, economic historian Barry Eichengreen explains why history is not a closed chapter, but a tool for diagnosing today’s economic and political risks. Speaking with Maya Eden, he connects the Great Depression to current challenges, from the global role of the US dollar to the resilience of central banks and democratic institutions.
Eichengreen uses the Great Depression as a reference point, not for historical nostalgia, but to show how crises unfold and how they can be prolonged. Markets, he argues, are not automatically self-stabilizing. Institutions and policy choices matter. Monetary tightening, premature fiscal restraint, and weak international coordination turned a severe downturn into a long-lasting crisis in the 1930s.
The parallels to today are hard to miss. Debates about debt brakes, fiscal discipline, central bank independence, and global coordination echo the same tensions. The key takeaway: economic progress is not guaranteed. When institutions weaken, even advanced economies become vulnerable.
Barry Eichengreen on Google Scholarbrowse
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Researchers
Barry Eichengreen is the George C. Pardee & Helen N. Pardee Chair and Distinguished Professor of Economics and Political Science at the University of California, Berkeley. He is one of the world’s leading experts on global monetary systems, financial crises, and economic history. His research spans exchange rates, capital flows, and the evolution of international institutions such as the IMF. Eichengreen has held visiting positions at the IMF, the Institute for Advanced Study in Berlin, and the Center for Advanced Study in the Behavioral Sciences in Palo Alto. He is a fellow of the American Academy of Arts and Sciences and chairs the Academic Advisory Committee of the Peterson Institute for International Economics. He has published widely cited books, including Hall of Mirrors: The Great Depression, the Great Recession, and the Uses – and Misuses – of History, and most recently In Defense of Public Debt (2021). His monthly columns on global macroeconomic issues appear regularly in Project Syndicate.
UZH Professor of Economics, Affiliated Professor at the UBS Center and CEPR
Maya Eden joined the Department of Economics at the University of Zurich as Professor of Economics in July 2024. She earned her Ph.D. in Economics at the Massachusetts Institute of Technology (MIT) in 2011. Following her doctoral studies, she spent six years as an economist in the Macroeconomics and Growth Team of the Development Economics Research Group at the World Bank. In 2017, she transitioned to academia as an Assistant Professor of Economics at Brandeis University, where she was promoted to Associate Professor in 2022. Prof. Eden is affiliated with the Center for Economic Policy Research (CEPR). She co-organizes the Virtual Seminar Series on Normative Economics and Economic Policy, serves as an Associate Editor of the Review of Economic Dynamics and a Co-Editor at Economics and Philosophy.
Barry Eichengreen is the George C. Pardee & Helen N. Pardee Chair and Distinguished Professor of Economics and Political Science at the University of California, Berkeley. He is one of the world’s leading experts on global monetary systems, financial crises, and economic history. His research spans exchange rates, capital flows, and the evolution of international institutions such as the IMF. Eichengreen has held visiting positions at the IMF, the Institute for Advanced Study in Berlin, and the Center for Advanced Study in the Behavioral Sciences in Palo Alto. He is a fellow of the American Academy of Arts and Sciences and chairs the Academic Advisory Committee of the Peterson Institute for International Economics. He has published widely cited books, including Hall of Mirrors: The Great Depression, the Great Recession, and the Uses – and Misuses – of History, and most recently In Defense of Public Debt (2021). His monthly columns on global macroeconomic issues appear regularly in Project Syndicate.
UZH Professor of Economics, Affiliated Professor at the UBS Center and CEPR
Maya Eden joined the Department of Economics at the University of Zurich as Professor of Economics in July 2024. She earned her Ph.D. in Economics at the Massachusetts Institute of Technology (MIT) in 2011. Following her doctoral studies, she spent six years as an economist in the Macroeconomics and Growth Team of the Development Economics Research Group at the World Bank. In 2017, she transitioned to academia as an Assistant Professor of Economics at Brandeis University, where she was promoted to Associate Professor in 2022. Prof. Eden is affiliated with the Center for Economic Policy Research (CEPR). She co-organizes the Virtual Seminar Series on Normative Economics and Economic Policy, serves as an Associate Editor of the Review of Economic Dynamics and a Co-Editor at Economics and Philosophy.