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Scylla and Charybdis. Explaining Europe’s Exit from Gold, January 1928 – December 1936

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  • Nikolaus Wolf

Abstract

The paper examines the timing of exit from the interwar gold-exchange standard for a panel of European countries, based on monthly data over the period January 1928 - December 1936. I show that exit from gold can be understood in terms of a trade-off between a limited set of factors commonly suggested in the theoretical literature on currency crises. A simple and parsimonious econometric framework that nests various hypotheses allows me to predict the month of exit in the 1930s, except for France. I consider the separate cases of France and Poland to show my results shed light on country-specific debates.

Suggested Citation

  • Nikolaus Wolf, 2008. "Scylla and Charybdis. Explaining Europe’s Exit from Gold, January 1928 – December 1936," CESifo Working Paper Series 2271, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_2271
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    References listed on IDEAS

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    1. Bordo, Michael D. & Rockoff, Hugh, 1996. "The Gold Standard as a “Good Housekeeping Seal of Approval”," The Journal of Economic History, Cambridge University Press, vol. 56(02), pages 389-428, June.
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    Cited by:

    1. Mitchener, Kris James & Wandschneider, Kirsten, 2015. "Capital controls and recovery from the financial crisis of the 1930s," Journal of International Economics, Elsevier, vol. 95(2), pages 188-201.
    2. Douglas A. Irwin, 2017. "The Missing Bretton Woods Debate over Flexible Exchange Rates," NBER Working Papers 23037, National Bureau of Economic Research, Inc.
    3. Crafts, Nicholas, 2012. "Western Europe's Growth Prospects: an Historical Perspective," CEPR Discussion Papers 8827, C.E.P.R. Discussion Papers.
    4. Eichengreen, Barry & Irwin, Douglas A., 2010. "The Slide to Protectionism in the Great Depression: Who Succumbed and Why?," The Journal of Economic History, Cambridge University Press, vol. 70(04), pages 871-897, December.
    5. Nikolaus Wolf, 2012. "Crises and Policy Responses within the Political Trilemma: Europe, 1929-1936 and 2008-2011," Working Papers 0016, European Historical Economics Society (EHES).
    6. Kirsten Wandschneider & Nikolaus Wolf, 2010. "Shooting on a moving target: explaining European bank rates during the interwar period," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 2(1/2), pages 31-48.

    More about this item

    Keywords

    gold-exchange standard; interwar period; Europe;

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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