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How the Gold Standard functioned in Portugal: an analysis of some macroeconomic aspects

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  • Ant�nio Portugal Duarte
  • Jo�o Sousa Andrade

Abstract

Portugal was the first country in Europe to join Great Britain in the Gold Standard, in 1854, having abandoned the principle of free gold convertibility in 1891. By elucidating the historical choice of the Gold Standard by the Portuguese authorities, and analysing its macroeconomic behaviour, we prove that it is a mistake to compare different monetary systems with the same indicators. Our examination of demand, supply and monetary shocks in the context of a Vector Autoregression (VAR) model confirm the idea of appropriate application of the principles of classical economics to the Gold Standard in Portugal. We also prove that the principles of demand management were not compatible with the functioning of the Gold Standard.

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File URL: http://hdl.handle.net/10.1080/00036846.2010.513675
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 44 (2012)
Issue (Month): 5 (February)
Pages: 617-629

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Handle: RePEc:taf:applec:44:y:2012:i:5:p:617-629

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Cited by:
  1. Harris Dellas & Goerge Tavlas, 2012. "The road to Ithaca: the Gold Standard, the Euro and the origins of the Greek sovereign debt crisis," Working Papers 149, Bank of Greece.
  2. Pedro BAÇÃO & António Portugal DUARTE & Mariana SIMÕES, 2013. "The International Monetary System in Flux: Overview and Prospects," Chapters of Financial Aspects of Recent Trends in the Global Economy book, in: Rajmund Mirdala (ed.), Financial Aspects of Recent Trends in the Global Economy, volume 1, chapter 10, pages 192-206 ASERS Publishing.
  3. João Sousa Andrade & Adelaide Duarte, 2011. "The Fundamentals of the Portuguese Crisis," GEMF Working Papers 2011-16, GEMF - Faculdade de Economia, Universidade de Coimbra.
  4. Ana Filipa Dias & António Portugal Duarte, 2012. "Euro Integration Reserve Currency?," Book Chapters, Institute of Economic Sciences.

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