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An empirical assessment of the Swedish Bullionist Controversy

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In the eighteenth century, a fierce political debate broke out in Sweden about the causes of an extraordinary depreciation of its currency. More specifically, the dete- riorating value of the Swedish daler was discretionarily blamed on monetary causes, e.g. the overissuing of banknotes, or nonmonetary causes, such as balance of payments deficits. This paper provides a comprehensive empirical assessment of this so-called "Swedish Bullionist Controversy". The results of vector autoregressions suggest that increasing amounts of paper money did give rise to in ation and a depreciation of the exchange rate. Conversely, nonmonetary factors were probably less important for these developments.

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  • Nils Herger, 2017. "An empirical assessment of the Swedish Bullionist Controversy," Working Papers 17.01, Swiss National Bank, Study Center Gerzensee.
    • Handle: RePEc:szg:worpap:1701
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