Threat of a capital levy, expected devaluation and interest rates in France during the interwar period
AbstractIn this paper we try to isolate and measure the respective importance of political and economic aspects in two critical episodes of France interwar. We do this by separating expectations of taxation and of devaluation that are implicitly included in the prices of various categories of French and foreign bonds. Concerning the 1924 26 crisis, we show first that there was no expectation of a government default; second that the rise of interest rates in 1925 results from expectations of a capital levy; third that no hyperinflation was ever expected. After stabilisation, we show that the markets expected an appreciation of the franc up to 1931 and a devaluation afterwards.
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Bibliographic InfoArticle provided by Cambridge University Press in its journal European Review of Economic History.
Volume (Year): 3 (1999)
Issue (Month): 01 (April)
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Other versions of this item:
- Hautcoeur, P-C. & Sicsic, P., 1998. "Threat of a Capital Levy, Expected Devaluation and Interest Rates in France during the Interwar Period," Working papers 50, Banque de France.
- Hautcoeur, P. C. & Sicsic, P., 1998. "Threat of a capital levy, expected devaluation and interest rates in France during the interwar period," DELTA Working Papers 98-01, DELTA (Ecole normale supérieure).
- E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
- N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
- N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
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.:
- Sicsic, Pierre, 1992. "Was the franc poincare deliberately undervalued?," Explorations in Economic History, Elsevier, vol. 29(1), pages 69-92, January.
- Baum, Christopher F & Thies, Clifford F, 1992. "On the Construction of Monthly Term Structures of U.S. Interest Rates, 1919-1930," Computer Science in Economics & Management, Society for Computational Economics, vol. 5(3), pages 221-46, August.
- Stephen G. Cecchetti, 1989.
"The Case of the Negative Nominal Interest Rates: New Estimates of the Term Structure of Interest Rates During the Great Depression,"
NBER Working Papers
2472, National Bureau of Economic Research, Inc.
- Cecchetti, Stephen G, 1988. "The Case of the Negative Nominal Interest Rates: New Estimates of the Term Structure of Interest Rates during the Great Depression," Journal of Political Economy, University of Chicago Press, vol. 96(6), pages 1111-41, December.
- Prati, Alessandro, 1991. "Poincare's stabilization : Stopping a run on government debt," Journal of Monetary Economics, Elsevier, vol. 27(2), pages 213-239, April.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Did nominal interest rates fail to spike during the run on the Franc?
by Jeremie Cohen-Setton in Noahpinion on 2013-10-29 04:29:00
- Paul Hallwood & Ronald MacDonald & Ian Marsh, 2011. "Remilitarization and the End of the Gold Bloc in 1936," De Economist, Springer, vol. 159(3), pages 305-321, September.
- Albrecht Ritschl, 2012.
"The German Transfer Problem, 1920-1933: A Sovereign Debt Perspective,"
CEP Discussion Papers
dp1155, Centre for Economic Performance, LSE.
- Ritschl, Albrecht, 2012. "The German Transfer Problem, 1920-1933: A Sovereign Debt Perspective," CEPR Discussion Papers 9062, C.E.P.R. Discussion Papers.
- Christoph Farquet, 2012. "The Rise Of The Swiss Tax Haven In The Interwar Period: An International Comparison," Working Papers 0027, European Historical Economics Society (EHES).
- Michael D. Bordo & Pierre-Cyrille Hautcoeur, 2003.
"Why didn't France follow the British Stabilization after World War One ?,"
DELTA Working Papers
2003-15, DELTA (Ecole normale supérieure).
- Michael D. Bordo & Pierre-Cyrille Hautcoeur, 2003. "Why didn't France follow the British Stabilization after World War One?," NBER Working Papers 9860, National Bureau of Economic Research, Inc.
- Grande Dépression en France in Wikipedia (French)
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