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Threat of a Capital Levy, Expected Devaluation and Interest Rates in France during the Interwar Period

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  • Hautcoeur, P-C.
  • Sicsic, P.

Abstract

This paper tries to improve the understanding of the French interwar monetary situation by using thoroughly one indicator: long-term interest rates. As such, it could be attacked from a methodological point of view as relying excessively on that indicator and on a small number of hypothesis (although we have empirical arguments for each of these). We do consider that if each one of our hypothesis (and then our measures) may be discussed, the global picture we draw is the only one which puts all the available data in a consistent order. This picture is different from the prevailing one in some aspects concerning the Poincaré stabilization, and reinforces one of the interpretations of the 1930s.

Suggested Citation

  • Hautcoeur, P-C. & Sicsic, P., 1998. "Threat of a Capital Levy, Expected Devaluation and Interest Rates in France during the Interwar Period," Working papers 50, Banque de France.
    • Handle: RePEc:bfr:banfra:50
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    References listed on IDEAS

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    1. Cecchetti, Stephen G, 1988. "The Case of the Negative Nominal Interest Rates: New Estimates of the Term Structure of Interest Rates during the Great Depression," Journal of Political Economy, University of Chicago Press, vol. 96(6), pages 1111-1141, December.
    2. Eichengreen, Barry, 1996. "Golden Fetters: The Gold Standard and the Great Depression, 1919-1939," OUP Catalogue, Oxford University Press, number 9780195101133, Decembrie.
    3. Sicsic, Pierre, 1992. "Was the franc poincare deliberately undervalued?," Explorations in Economic History, Elsevier, vol. 29(1), pages 69-92, January.
    4. Baum, Christopher F & Thies, Clifford F, 1992. "On the Construction of Monthly Term Structures of U.S. Interest Rates, 1919-1930," Computer Science in Economics & Management, Kluwer;Society for Computational Economics, vol. 5(3), pages 221-246, August.
    5. Prati, Alessandro, 1991. "Poincare's stabilization : Stopping a run on government debt," Journal of Monetary Economics, Elsevier, vol. 27(2), pages 213-239, April.
    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Did nominal interest rates fail to spike during the run on the Franc?
      by Jeremie Cohen-Setton in Noahpinion on 2013-10-29 09:29:00
    2. Leçons historiques des fortes augmentations de la dette publique
      by Emeline in Bloc-Notes Eco on 2020-06-10 12:52:02
    3. Historical lessons from large increases in government debt
      by GAILLARD in Eco Notepad on 2020-06-10 14:03:18

    Citations

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    Cited by:

    1. Giovanni B. Pittaluga & Elena Seghezza, 2012. "The role of Rentiers in the stabilization processes of the 1920s," European Review of Economic History, European Historical Economics Society, vol. 16(2), pages 188-210, May.
    2. Seghezza, Elena & Morelli, Pierluigi, 2014. "Conflict inflation and delayed stabilization," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 171-184.
    3. Paul Hallwood & Ronald MacDonald & Ian Marsh, 2011. "Remilitarization and the End of the Gold Bloc in 1936," De Economist, Springer, vol. 159(3), pages 305-321, September.
    4. Raphaël Hekimian, 2017. "The French banking sector during the interwar: What lessons can be drawn from the stock market?," EconomiX Working Papers 2017-3, University of Paris Nanterre, EconomiX.
    5. Farquet, Christophe & Leimgruber, Matthieu, 2016. "Explaining the failure of international tax regulations throughout the 20th century. Offshore Markets, Swiss Tax Haven's Diplomacy and Fiscal Debates in International Organizations, From the League of," Working Papers unige:88348, University of Geneva, Paul Bairoch Institute of Economic History.
    6. Hautcoeur, Pierre-Cyrille, 2004. "Efficiency, competition, and the development of life insurance in France (1870-1939): Or: should we trust pension funds?," Explorations in Economic History, Elsevier, vol. 41(3), pages 205-232, July.
    7. Monnet, Eric, 2019. "Interest rates," CEPR Discussion Papers 13896, C.E.P.R. Discussion Papers.
    8. Bignon, Vincent & Flandreau, Marc, 2018. "The Other Way: A Narrative History of the Bank of France," CEPR Discussion Papers 13138, C.E.P.R. Discussion Papers.
    9. Michael D. Bordo & Pierre-Cyrille Hautcoeur, 2003. "Why didn't France follow the British Stabilization after World War One ?," DELTA Working Papers 2003-15, DELTA (Ecole normale supérieure).
    10. Ritschl, Albrecht & Straumann, Tobias, 2009. "Business cycles and economic policy, 1914-1945: a survey," Economic History Working Papers 22402, London School of Economics and Political Science, Department of Economic History.
    11. Pierre-Cyrille Hautcoeur, 2006. "Why and how to measure stock market fluctuations? The early history of stock market indices, with special reference to the French case," Working Papers halshs-00590522, HAL.
    12. Christoph Farquet, 2012. "The Rise Of The Swiss Tax Haven In The Interwar Period: An International Comparison," Working Papers 0027, European Historical Economics Society (EHES).
    13. Ritschl, Albrecht, 2012. "The German Transfer Problem, 1920-1933: A Sovereign Debt Perspective," CEPR Discussion Papers 9062, C.E.P.R. Discussion Papers.
    14. Raphaël Hekimian, 2017. "The French banking sector during the interwar: What lessons can be drawn from the stock market?," Working Papers hal-04141670, HAL.

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    More about this item

    Keywords

    Interest rate ; politics ; Poincare;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-

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    1. Grande Dépression en France in Wikipedia French

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