Currency Crisis and Unemployment: Sterling in 1931 / Barry Eichengreen, Olivier Jeanne.

Format:

Book

Author/Creator:

Eichengreen, Barry.

Contributor:

National Bureau of Economic Research.

Jeanne, Olivier.

Series:

Working Paper Series (National Bureau of Economic Research) no. w6563.

NBER working paper series no. w6563

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Currency Crisis and Unemployment

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1998.

Summary:

This paper studies the role of unemployment in sterling's interwar experience. According to most narrative accounts, the proximate cause of the 1931 sterling crisis was a high and rising unemployment rate that placed pressure on British governments to pursue reflationary policies. We present a model which, in the spirit of the second generation' approach to currency crises, highlights the conflict between the objective of low unemployment and defense of the currency and show that it can reproduce the main features of sterling's interwar experience. Econometric evidence lends further support to the view that the proximate cause of the sterling crisis was the dramatic rise in unemployment brought about by external deflationary forces.

Notes:

Print version record

May 1998.