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

Stability without a pact?: Lessons from the European Gold Standard? 1880-1913

Abstract : The high level of trade and financial integration reached by Europe both today and under the late 19th century gold standard suggests that important lessons can be learned by looking at past record to inform current issues. In this article, we draw a fresh picture of the European gold standard, and use it to derive a number of useful implications. The paper’s basic finding is that the stability of the European gold standard depended on the stance of the common monetary policy. Under the gold standard, this stance was disturbingly deflationary prior to 1895. As a result, debts became exceedingly heavy and monetary standards crumbled under their weight, not so much because fiscal policies became looser, but rather because debt burdens became unsustainable in the wake of continued deflation. Once gold was discovered and deflation gave way to inflation, real interest rates fell and debt grew more slowly. This study’s clear implication for the EMU zone, is that stability will hinge on the European Central Bank’s (ECB) policy not being too restrictive.
Document type :
Journal articles
Complete list of metadata

https://hal-sciencespo.archives-ouvertes.fr/hal-03416381
Contributor : Spire Sciences Po Institutional Repository Connect in order to contact the contributor
Submitted on : Friday, November 5, 2021 - 11:20:42 AM
Last modification on : Thursday, May 26, 2022 - 3:57:45 AM

Identifiers

  • HAL Id : hal-03416381, version 1
  • SCIENCESPO : 2441/644

Collections

Citation

Marc Flandreau, Jacques Le Cacheux, Frédéric Zumer. Stability without a pact?: Lessons from the European Gold Standard? 1880-1913. Economic Policy, 1998, 13 (26), pp.115 - 162. ⟨hal-03416381⟩

Share

Metrics

Record views

4