Bagehot for beginners: The making of lending of last resort operations in the mid-19th century
AbstractAccording to a Keynesian view, short term output fluctuations are normally demand side led. Since prices reflect demand, they should mirror output fluctuations. Thus, prices and output are expected to move in the same direction in the short run. The present paper investigates the historical co-movements of output and prices for a small open raw material based economy, in this case Norway 1830-2006. We find little evidence of a positive relationship. On the contrary, we rather find negative correlations between the two variables, indicating that supply side shocks through the foreign sector were more important for historical business cycles in Norway than assumed hitherto.
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Bibliographic InfoPaper provided by Norges Bank in its series Working Paper with number 2009/22.
Length: 38 pages
Date of creation: 05 Oct 2009
Date of revision:
Lending of last resort; Bagehot; Bank of England; financial crises; history of monetary policy;
Other versions of this item:
- Vincent Bignon & Marc Flandreau & Stefano Ugolini, 2012. "Bagehot for beginners: the making of lender‐of‐last‐resort operations in the mid‐nineteenth century," Economic History Review, Economic History Society, vol. 65(2), pages 580-608, 05.
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- G01 - Financial Economics - - General - - - Financial Crises
- N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-12-05 (All new papers)
- NEP-CBA-2009-12-05 (Central Banking)
- NEP-HIS-2009-12-05 (Business, Economic & Financial History)
- NEP-MAC-2009-12-05 (Macroeconomics)
- NEP-MON-2009-12-05 (Monetary Economics)
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- Marc Flandreau, 2011. "Panel Statement - No Bagehot - historical perspectives on central bank policies during the sub-prime crisis," Chapters, European Central Bank.
- Dimitrios Bisias & Mark Flood & Andrew W. Lo & Stavros Valavanis, 2012. "A Survey of Systemic Risk Analytics," Annual Review of Financial Economics, Annual Reviews, vol. 4(1), pages 255-296, October.
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