HAL will be down for maintenance from Friday, June 10 at 4pm through Monday, June 13 at 9am. More information
Skip to Main content Skip to Navigation
Journal articles

The logic of compromise : monetary bargaining in Austria-Hungary 1867-1913

Abstract : This paper examines the historical record of the Austro-Hungarian monetary union, focusing on its bargaining dimension. As a result of the 1867 Compromise, Austria and Hungary shared a common currency, although they were fiscally sovereign and independent entities. By using repeated threats to quit, Hungary succeeded in obtaining more than proportional control and forcing the common central bank into a policy that was very favourable to it. Using insights from public economics, this paper explains the reasons for this outcome. Because Hungary would have been able to secure quite good conditions for itself had it broken apart, Austria had to provide its counterpart with incentives to stay on board. I conclude that the eventual split of Hungary after WWI was therefore not written on the wall in 1914, since the Austro-Hungarian monetary union was quite profitable to Hungarians.
Document type :
Journal articles
Complete list of metadata

Cited literature [9 references]  Display  Hide  Download

Contributor : Spire Sciences Po Institutional Repository Connect in order to contact the contributor
Submitted on : Tuesday, October 7, 2014 - 11:01:48 AM
Last modification on : Tuesday, October 11, 2016 - 1:42:16 PM
Long-term archiving on: : Thursday, January 8, 2015 - 10:41:48 AM


Explicit agreement for this submission


  • HAL Id : hal-01071968, version 1
  • SCIENCESPO : 2441/604



Marc Flandreau. The logic of compromise : monetary bargaining in Austria-Hungary 1867-1913. European Review of Economic History, Oxford University Press (OUP), 2006, 10 (1), pp.3-33. ⟨hal-01071968⟩



Record views


Files downloads