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An ‘art’, not a ‘science’? Central bank management in Portugal under the gold standard, 1863–87

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  • JAIME REIS

Abstract

As long as Portugal was on the gold standard, the Bank of Portugal sought to help stabilize the currency at the exchange rate to which the country was committed. Because it was subject to political and other non‐economic constraints, the bank carried out discount rate interventions sparingly, although in accordance with what could be termed the contemporary ‘science’ of central banking. Consequently, it had to intervene frequently in the currency markets, usually in covert fashion, in order to conciliate the needs of convertibility with this less than orthodox stance towards the gold standard. This article also shows how the bank was able to keep on repeatedly infringing the ‘rules of the game’ with success for almost 30 years, and raises the question of the sustainability of such a state of affairs.

Suggested Citation

  • Jaime Reis, 2007. "An ‘art’, not a ‘science’? Central bank management in Portugal under the gold standard, 1863–87," Economic History Review, Economic History Society, vol. 60(4), pages 712-741, November.
    • Handle: RePEc:bla:ehsrev:v:60:y:2007:i:4:p:712-741
    DOI: 10.1111/j.1468-0289.2006.00374.x
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    References listed on IDEAS

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    1. Marc Flandreau & Jacques Le Cacheux & Frédéric Zumer, 1998. "Stability without a pact?," Post-Print hal-03416381, HAL.
    2. Esteves, Rui Pedro & Reis, Jaime & Ferramosca, Fabiano, 2009. "Market Integration in the Golden Periphery. The Lisbon/London Exchange, 1854-1891," Explorations in Economic History, Elsevier, vol. 46(3), pages 324-345, July.
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    5. Marc Flandreau & Jacques Le Cacheux & Frédéric Zumer, 1998. "Stability without a pact? Lessons from the European gold standard, 1880—1914," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 13(26), pages 116-162.
    6. Michael D. Bordo & Ronald MacDonald, 1997. "Violations of the `Rules of the Game' and the Credibility of the Classical Gold Standard, 1880-1914," NBER Working Papers 6115, National Bureau of Economic Research, Inc.
    7. Gerlach, Stefan, 2004. "Interest Rate Setting by the ECB: Words and Deeds," CEPR Discussion Papers 4775, C.E.P.R. Discussion Papers.
    8. Marc Flandreau, 1997. "The Gold Standard in Theory and History," Post-Print hal-03416310, HAL.
    9. Frédéric Zumer & Jacques Le Cacheux & Marc Flandreau, 1998. "Stability without a pact? Lessons from the European Gold Standard, 1880-1913," Sciences Po Economics Publications (main) hal-01037858, HAL.
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    Cited by:

    1. Singleton,John, 2010. "Central Banking in the Twentieth Century," Cambridge Books, Cambridge University Press, number 9780521899093, January.

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