Money dynamics with multiple banks of issue: evidence from Spain 1856-1874
This paper analyzes the Spanish monetary system from 1856, when the Bank of Spain was created, to 1874, when it was awarded the monopoly of emission. This period was characterized by the emergence of an unregulated banking system, with multiple banks of issue entitled to emit bank notes. We focus on two main issues: i) the large fluctuations in the money supply during this period; and ii) the lack of a lender of last resort in the banking panic of 1866. To analyze this, we construct a new dataset on money supply aggregates. The paper also estimates the economic impact of monetary fluctuations with the help of a calibrated new Keynesian model. Our results suggest that money supply shocks had a milder effect on inflation and output than the one predicted by the theory.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael D. Bordo & Ehsan U. Choudhri & Anna J. Schwartz, 1993.
"Could Stable Money Have Averted The Great Contraction?,"
NBER Working Papers
4481, National Bureau of Economic Research, Inc.
- Bordo, Michael D & Choudhri, Ehsan U & Schwartz, Anna J, 1995. "Could Stable Money Have Averted the Great Contraction?," Economic Inquiry, Western Economic Association International, vol. 33(3), pages 484-505, July.
- Harold L. Cole & Lee E. Ohanian, 1999. "The Great Depression in the United States from a neoclassical perspective," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win, pages 2-24.
- Michael D. Bordo & Christopher J. Erceg & Charles L. Evans, 1997.
"Money, sticky wages, and the Great Depression,"
International Finance Discussion Papers
591, Board of Governors of the Federal Reserve System (U.S.).
- Michael D. Bordo & Christopher J. Erceg & Charles L. Evans, 1997. "Money, sticky wages, and the Great Depression," Working Paper Series, Macroeconomic Issues WP-97-02, Federal Reserve Bank of Chicago.
- Michael D. Bordo & Christopher J. Erceg & Charles L. Evans, 1997. "Money, Sticky Wages, and the Great Depression," NBER Working Papers 6071, National Bureau of Economic Research, Inc.
- Prados de la Escosura Leandro, 2003. "El progreso económico de España (1850-2000)," Books, Fundacion BBVA / BBVA Foundation, edition 1, number 201136.
- Bernanke, B. & Gertler, M. & Gilchrist, S., 1998.
"The Financial Accelerator in a Quantitative Business Cycle Framework,"
98-03, C.V. Starr Center for Applied Economics, New York University.
- Bernanke, Ben S. & Gertler, Mark & Gilchrist, Simon, 1999. "The financial accelerator in a quantitative business cycle framework," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 21, pages 1341-1393 Elsevier.
- Ben Bernanke & Mark Gertler & Simon Gilchrist, 1998. "The Financial Accelerator in a Quantitative Business Cycle Framework," NBER Working Papers 6455, National Bureau of Economic Research, Inc.
- Jordi Galí, 2008.
"Introduction to Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework
[Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Ke," Introductory Chapters, Princeton University Press.
- Marc Flandreau & Stefano Ugolini, 2011.
"Where It All Began: Lending of Last Resort and the Bank of England During the Overend, Gurney Panic of 1866,"
0007, European Historical Economics Society (EHES).
- Marc Flandreau, Stefano Ugolini, 2011. "Where It All Began: Lending of Last Resort and the Bank of England during the Overend, Gurney Panic of 1866," IHEID Working Papers 04-2011, Economics Section, The Graduate Institute of International Studies.
- Marc Flandreau & Stefano Ugolini, 2011. "Where it all began: lending of last resort and the Bank of England during the Overend-Gurney panic of 1866," Working Paper 2011/03, Norges Bank.
- Flandreau, Marc & Ugolini, Stefano, 2011. "Where It All Began: Lending of Last Resort and the Bank of England during the Overend, Gurney Panic of 1866," CEPR Discussion Papers 8362, C.E.P.R. Discussion Papers.
- Timothy J. Kehoe & Edward C. Prescott, 2002.
"Great Depressions of the Twentieth Century,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 5(1), pages 1-18, January.
- Timothy Kehoe & Edward Prescott, 2002. "Data Appendix to Great Depressions of the Twentieth Century," Technical Appendices kehoe02, Review of Economic Dynamics.
- Blanchard, Olivier Jean & Kahn, Charles M, 1980. "The Solution of Linear Difference Models under Rational Expectations," Econometrica, Econometric Society, vol. 48(5), pages 1305-11, July.
- Jordi Gal� & Tommaso Monacelli, 2005. "Monetary Policy and Exchange Rate Volatility in a Small Open Economy," Review of Economic Studies, Oxford University Press, vol. 72(3), pages 707-734.
When requesting a correction, please mention this item's handle: RePEc:bde:wpaper:1119. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mar�a Beiro. Electronic Dissemination of Information Unit. Research Department. Banco de Espa�a)
If references are entirely missing, you can add them using this form.