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Fiscal Sustainability and the Value of Money: Lessons from the British Paper Pound, 1797-1821

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  • Antipa, P.

Abstract

This article explores the determinants of price level fluctuations in Britain during the first suspension of the gold standard over the 1797-1821 period. I find that the contemporary price level was determined by world gold prices and expectations regarding the resumption of the gold standard at the pre-war parity. As the latter hinged on market participants’ expectations concerning the financial burden of the Napoleonic Wars, my contribution establishes the importance of fiscal factors for the determination of the price level.

Suggested Citation

  • Antipa, P., 2013. "Fiscal Sustainability and the Value of Money: Lessons from the British Paper Pound, 1797-1821," Working papers 466, Banque de France.
  • Handle: RePEc:bfr:banfra:466
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    References listed on IDEAS

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    Cited by:

    1. Joshua R. Hendrickson, 2018. "The Bullionist Controversy: Theory and New Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 50(1), pages 203-241, February.

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    More about this item

    Keywords

    Fiscal Theory of the Price Level; debt monetization; structural breaks.;
    All these keywords.

    JEL classification:

    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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