A pioneer of a new monetary policy? Sweden's price-level targeting of the 1930s revisited

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A pioneer of a new monetary policy? Sweden's price-level targeting of the 1930s revisited

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STRAUMANN, TOBIAS
WOITEK, ULRICH

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Ulrich Woitek

Abstract

The article re-examines Sweden's price-level targeting during the 1930s which is regarded as a precursor of today's inflation targeting. According to conventional wisdom, the Riksbank was the first central bank to adopt price-level targeting, although in practice giving priority to exchange-rate stabilisation. Based on Bayesian econometric techniques and the evaluation of new archival sources, we come to the conclusion that defending a fixed exchange rate is hard to reconcile with the claim of adopting price-level targeting. This finding has implications for the prevailing view of the 1930s as a decade of great policy innovations.

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Publisher Info
Article provided by Cambridge University Press in its journal European Review of Economic History.

Volume (Year): 13 (2009)
Issue (Month): 02 (August)
Pages: 251-282
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Handle: RePEc:cup:ereveh:v:13:y:2009:i:02:p:251-282_00

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Paper
- Tobias Straumann & Ulrich Woitek, 2008. "A pioneer of a new monetary policy? Sweden’s price level targeting of the 1930s revisited," IEW - Working Papers iewwp386, Institute for Empirical Research in Economics - IEW. [Downloadable!]

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Timothy Cogley & Thomas Sargent, . "Drifts and Volatilities: Monetary Policies and Outcomes in the Post WWII US," Working Papers 2133503, Department of Economics, W. P. Carey School of Business, Arizona State University. [Downloadable!]
Other versions:
- Timothy Cogley & Thomas J. Sargent, 2003. "Drifts and volatilities: monetary policies and outcomes in the post WWII U.S," Working Paper 2003-25, Federal Reserve Bank of Atlanta. [Downloadable!]
- Timothy Cogley & Thomas J. Sargent, 2005. "Drift and Volatilities: Monetary Policies and Outcomes in the Post WWII U.S," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 8(2), pages 262-302, April. [Downloadable!] (restricted)
Jonung, Lars, 1979. "Knut wicksell's norm of price stabilization and Swedish monetary policy in the 1930's," Journal of Monetary Economics, Elsevier, vol. 5(4), pages 459-496, October. [Downloadable!] (restricted)
Guillermo A. Calvo & Carmen M. Reinhart, 2002. "Fear Of Floating," The Quarterly Journal of Economics, MIT Press, vol. 117(2), pages 379-408, May. [Downloadable!] (restricted)
Other versions:
- Reinhart, Carmen & Calvo, Guillermo, 2002. "Fear of floating," MPRA Paper 14000, University Library of Munich, Germany. [Downloadable!]
- Guillermo A. Calvo & Carmen M. Reinhart, 2000. "Fear of Floating," NBER Working Papers 7993, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Berg, Claes & Jonung, Lars, 1999. "Pioneering price level targeting: The Swedish experience 1931-1937," Journal of Monetary Economics, Elsevier, vol. 43(3), pages 525-551, June. [Downloadable!] (restricted)
Other versions:
- Berg, Claes & Jonung, Lars, 1998. "Pioneering Price Level Targeting: The Swedish Experience 1931-1937," Seminar Papers 642, Stockholm University, Institute for International Economic Studies. [Downloadable!]
- Berg, C. & Jonung, L., 1998. "Pioneering Price Level Targeting: The Swedish Experience 1931-1937," Papers 642, Stockholm - International Economic Studies.
- Berg, Claes & Jonung, Lars, 1998. "Pioneering Price Level Targeting:The Swedish Experience 1931-1937," Working Paper Series in Economics and Finance 290, Stockholm School of Economics. [Downloadable!]
Levy-Yeyati, Eduardo & Sturzenegger, Federico, 2005. "Classifying exchange rate regimes: Deeds vs. words," European Economic Review, Elsevier, vol. 49(6), pages 1603-1635, August. [Downloadable!] (restricted)
Jacquier, Eric & Polson, Nicholas G & Rossi, Peter E, 1994. "Bayesian Analysis of Stochastic Volatility Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(4), pages 371-89, October.
Other versions:
- Jacquier, Eric & Polson, Nicholas G & Rossi, Peter E, 2002. "Bayesian Analysis of Stochastic Volatility Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 69-87, January.

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