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Currency crisis and collapse in interwar Greece: predicament or policy failure?

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  • Nicos Christodoulakis

Abstract

In 1928 Greece viewed the anchoring to the Gold Exchange Standard as the imperative choice in order to implant financial credibility and attract foreign capital. After the British pound exited the system in 1931, Greece chose a defence that exhausted foreign reserves and finally quitted in 1932. The Drachma devalued and debt payments were repudiated. Instead of a fast recovery, unemployment rose and the country entered a period of instability that ended with the imposition of dictatorship in 1936. The lessons are perhaps relevant for the costs that Greece would likely face by exiting the Eurozone. Copyright , Oxford University Press.

Suggested Citation

  • Nicos Christodoulakis, 2013. "Currency crisis and collapse in interwar Greece: predicament or policy failure?," European Review of Economic History, Oxford University Press, vol. 17(3), pages 272-293, August.
  • Handle: RePEc:oup:ereveh:v:17:y:2013:i:3:p:272-293
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    File URL: http://hdl.handle.net/10.1093/ereh/het008
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    References listed on IDEAS

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    1. Aleh Tsyvinski & Arijit Mukherji & Christian Hellwig, 2006. "Self-Fulfilling Currency Crises: The Role of Interest Rates," American Economic Review, American Economic Association, vol. 96(5), pages 1769-1787, December.
    2. Dornbusch, Rudiger, 1987. "Collapsing exchange rate regimes," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 71-83, October.
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    More about this item

    JEL classification:

    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

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