Download Fixed Ideas of Money: Small States and Exchange Rate Regimes by Tobias Straumann PDF

By Tobias Straumann

Such a lot ecu nations are fairly small, but we all know little approximately their financial background. This e-book analyses for the 1st time the adventure of 7 small states (Austria, Belgium, Denmark, the Netherlands, Norway, Sweden, and Switzerland) over the past hundred years, beginning with the recovery of the most effective after international battle I and finishing with Sweden's rejection of the Euro in 2003. The comparative research exhibits that for the main a part of the 20th century the choices of coverage makers have been heavily limited by way of a different worry of floating trade premiums. in basic terms with the challenge of the eu financial process (EMS) in 1992-93 did the concept that a versatile alternate cost regime was once suited to a small open economic system achieve foreign money. The publication additionally analyses the diversities between small states and concludes that financial constructions or international coverage orientations have been way more very important for the timing of regime adjustments than family associations and regulations.

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Extra resources for Fixed Ideas of Money: Small States and Exchange Rate Regimes in Twentieth-Century Europe (Studies in Macroeconomic History)

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97–99) also highlight the importance of Swedish economists for policymaking. The article by Montgomery (1955) also has been influential. For a short overview of the crisis of the early 1920s, see Schön (2000, pp. 287ff ). Early Divergence 29 on the Riksbank took place. 9 In the First Chamber, whose members were elected indirectly through the county councils and town councils of the larger cities so that the upper classes dominated, the vote was overwhelmingly in favor of the proposal. 10 In the course of the debate, prominent politicians of all parties criticized the Riksbank for its unwillingness to raise the discount rate in the face of rising inflation rates.

1. Chronology of the Gold Standard Return to Gold Off Gold de facto de jure France 1926 1928 Germany 1923 1924 1931 United Kingdom 1925 1925 1931 1936 Austria 1922 1923 1931 Belgium 1926 1926 1935 Netherlands 1924 1925 1936 Switzerland 1924 1925 1936 Denmark 1926 1927 1931 Norway 1928 1928 1931 Sweden 1922 1924 1931 Source: Aldcroft and Oliver (1998, p. 5), date of de jure stabilization corrected for Austria, Denmark, and Sweden on the basis of Bachinger et al. (2001), Johansen (1987), and Östlind (1945).

The goal was not to eliminate the market but to stretch the period of adjustment and to control the terms of adjustment. In other words, the preference for fixed exchange rates was based on the same sense of vulnerability that inspired 33 34 Ferrari (1990). Bordo (1993). 35 Thus “fixed ideas” were based not on irrational beliefs but rather on considerations that even from today’s viewpoint are comprehensible. SMALL VERSUS SMALL Of course, country size was not the only determinant of how small European states chose their exchange-rate regime during the twentieth century.

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