The Inter-War Gold Exchange Standard: Credibility and Monetary Independence / Michael D. Bordo, Ronald MacDonald.

Format:

Book

Author/Creator:

Bordo, Michael D.

Contributor:

National Bureau of Economic Research.

MacDonald, Ronald.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8429.

NBER working paper series no. w8429

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The Inter-War Gold Exchange Standard

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2001.

Summary:

In this paper we analyze the operation of the inter-war gold exchange standard to see if the evident credibility of the system conferred on participating central banks the ability to pursue independent monetary policies. To answer this question we econometrically analyze two key parity, or arbitrage, conditions, namely uncovered interest rate parity and a yield gap relationship. We find that there were both long- and short-run deviations from the arbitrage conditions. The use to which this policy independence was put is analyzed in the context of a multivariate system, which includes reaction function variables.

Notes:

Print version record

August 2001.