Relaxing the External Constraint: Europe in the 1930s / Barry Eichengreen.

Format:

Book

Author/Creator:

Eichengreen, Barry.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3410.

NBER working paper series no. w3410

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Relaxing the External Constraint

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1990.

Summary:

This paper documents the effects of exchange rates and the external constraint during the interwar years. In the absence of international policy coordination, exchange rate depreciation is shown to have been a necessary precondition for the adoption of policies promoting recovery from the Great Depression. But currency depreciation was not without costs. It increased the variability of nominal exchange rates and rendered them increasingly difficult to predict. Increased variability and uncertainty about nominal exchange rates carried over to short-term changes in real exchange rates as well. Thus, exchange rate variability appears to have introduced additional noise into the operation of the price mechanism.

Notes:

Print version record

August 1990.