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Discipline or external balance? The choice of international monetary systems in Europe

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  • Ljungberg, Jonas

    () (Department of Economic History, Lund University)

  • Ögren, Anders

    () (Department of Economic History, Lund University)

Abstract

While there is a huge literature on exchange rate systems since the classical gold standard, less research has been devoted to comparisons of the different arguments that guided the choices. While the origin of the international gold standard in the 1870s was a result of silver coins disappearing from circulation due to rising silver prices, the gold standard has later been interpreted as a quest for monetary discipline. This discipline argument was introduced by the end of WWI as a support for a restoration of the gold standard. Its failure led to an emphasis on the need to avoid external imbalances, which came to the fore in the preparations of the Bretton Woods system. The balance argument was also central in the early discussions of a monetary union in Europe, but with the critique of Keynesianism it was superseded by the disciplinary argument which became determinant for the design of EMU.

Suggested Citation

  • Ljungberg, Jonas & Ögren, Anders, 2019. "Discipline or external balance? The choice of international monetary systems in Europe," Lund Papers in Economic History 190, Lund University, Department of Economic History.
  • Handle: RePEc:hhs:luekhi:0190
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    File URL: http://lup.lub.lu.se/record/f6094e96-acf5-4eaf-a644-8f9fc0309097
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    References listed on IDEAS

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    1. Flandreau, Marc, 1996. "The French Crime of 1873: An Essay on the Emergence of the International Gold Standard, 1870–1880," The Journal of Economic History, Cambridge University Press, vol. 56(4), pages 862-897, December.
    2. Mongelli, Francesco Paolo, 2002. "ìNew" Views on the Optimum Currency Area Theory: What is EMU Telling US?," Royal Economic Society Annual Conference 2002 140, Royal Economic Society.
    3. Oppers, Stefan Erik, 1996. "Was the worldwide shift to gold inevitable? An analysis of the end of bimetallism," Journal of Monetary Economics, Elsevier, vol. 37(1), pages 143-162, February.
    4. David Cobham, 1996. "Causes and Effects of the European Monetary Crises of 1992–93," Journal of Common Market Studies, Wiley Blackwell, vol. 34(4), pages 585-604, December.
    5. Øksendal, Lars Fredrik, 2007. "The impact of the Scandinavian Monetary Union on financial market integration," Financial History Review, Cambridge University Press, vol. 14(2), pages 125-148, October.
    6. Klas Fregert, 2013. "Belling the Cat: Eli F. Heckscher on the Gold Standard as a Disciplinary Device," History of Political Economy, Duke University Press, vol. 45(1), pages 39-59, Spring.
    7. Dyson, Kenneth & Featherstone, Kevin, 1999. "The Road To Maastricht: Negotiating Economic and Monetary Union," OUP Catalogue, Oxford University Press, number 9780198296386.
    8. Eichengreen, Barry, 1996. "Golden Fetters: The Gold Standard and the Great Depression, 1919-1939," OUP Catalogue, Oxford University Press, number 9780195101133.
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    Cited by:

    1. Ljungberg, Jonas, 2019. "Baltic Integration and the Euro," Lund Papers in Economic History 198, Lund University, Department of Economic History.

    More about this item

    Keywords

    exhange rates; Europe; gold standard; EMU;

    JEL classification:

    • B17 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - International Trade and Finance
    • B27 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - International Trade and Finance
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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