International Economics and Domestic Politics: Notes on the Twenties
Document Type
Book Chapter
Publication Date
9-1-1995
Abstract
There were radical differences in post‐war exchange‐rate regimes, and associated monetary and fiscal policies. Some countries accommodated moderate inflation by abandoning their pre‐war gold parities; others subjected themselves to painful deflation in order to restore gold convertibility at the pre‐war rates. Major policy differences were again evident in response to the Great Depression, with some eagerly abandoning the gold standard, others seeking at all costs to preserve it. To explain these differences, Eichengreen and Simmons investigate the relationship between economic policy and domestic political systems. They find that countries with independent central banks, more stable governments, larger governing majorities, and, more surprisingly, left‐wing parliamentary majorities were better able to resist currency depreciation in the 1920s.
Keywords
central banks, currency depreciation, deflation, exchange rates, fiscal policy, gold standard, Great Depression, inflation, monetary policy, political systems
Publication Title
Banking, Currency, and Finance in Europe Between the Wars
Repository Citation
Simmons, Beth and Eichengreen, Barry, "International Economics and Domestic Politics: Notes on the Twenties" (1995). Book Chapters. 170.
https://scholarship.law.upenn.edu/faculty_chapters/170
https://doi.org/10.1093/0198288034.003.0005
DOI
https://doi.org/10.1093/0198288034.003.0005