Emerging from the war: Gold Standard mentality, current accounts and the international business cycle 1885-1939
We study international business cycles and capital flows in the UK, the United States and the Emerging Periphery in the period 1885-1939. Based on the same set of parameters, our model explains current account dynamics under both the Classical Gold Standard and during the Interwar period. We interpret this as evidence for Gold Standard mentality: the expectation formation mechanism with respect to major macroeconomic variables driving the current account – output, exchange rates and interest rates – has remained fundamentally stable between the two periods. Nonetheless, the macroeconomic environment changed: Volatility increased generally, but less so for international capital flows than for GDP. This pattern is consistent with shocks in the Interwar period becoming more persistent and more global.
|Date of creation:||Dec 2011|
|Date of revision:|
|Contact details of provider:|| Postal: Schönberggasse 1, CH-8001 Zürich|
Phone: +41-1-634 21 37
Fax: +41-1-634 49 82
Web page: http://www.econ.uzh.ch/
More information through EDIRC
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.:
- Takashi Kano, 2007.
"Habit Formation and the Present-Value Model of the Current Account: Yet Another Suspect,"
CIRJE-F-505, CIRJE, Faculty of Economics, University of Tokyo.
- Kano, Takashi, 2009. "Habit formation and the present-value model of the current account: Yet another suspect," Journal of International Economics, Elsevier, vol. 78(1), pages 72-85, June.
- Takashi Kano, 2008. "Habit Formation and the Present-Value Model of the Current Account: Yet Another Suspect," CIRJE F-Series CIRJE-F-572, CIRJE, Faculty of Economics, University of Tokyo.
- Maurico Obstfeld, 2004.
Review of World Economics (Weltwirtschaftliches Archiv),
Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 140(4), pages 541-568, December.
- Obstfeld, Maurice, 2004. "External Adjustment," Center for International and Development Economics Research, Working Paper Series qt7bw468wx, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
- Maurice Obstfeld, 2004. "External Adjustment," NBER Working Papers 10843, National Bureau of Economic Research, Inc.
- Wright, Mark L. J., 2004. "Global Capital Markets: Integration, Crisis, and Growth. By Maurice Obstfeld and Alan M. Taylor. Cambridge: Cambridge University Press, 2004. Pp. xviii, 354. $65," The Journal of Economic History, Cambridge University Press, vol. 64(04), pages 1151-1153, December.
- Meissner, Christopher M & Taylor, Alan M., 2006.
"Losing our Marbles in the New Century? The Great Rebalancing in Historical Perspective,"
CEPR Discussion Papers
5917, C.E.P.R. Discussion Papers.
- Christopher M. Meissner & Alan M. Taylor, 2006. "Losing our marbles in the new century?: the great rebalancing in historical perspective," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 51.
- Christopher M. Meissner & Alan M. Taylor, 2006. "Losing our Marbles in the New Century? The Great Rebalancing in Historical Perspective," NBER Working Papers 12580, National Bureau of Economic Research, Inc.
- Hoffmann, Mathias, 1999.
"International macroeconomic fluctuations and the current account,"
Discussion Paper Series In Economics And Econometrics
9915, Economics Division, School of Social Sciences, University of Southampton.
- Mathias Hoffmann, 2003. "International macroeconomic fluctuations and the current account," Canadian Journal of Economics, Canadian Economics Association, vol. 36(2), pages 401-420, May.
- Obstfeld,Maurice & Taylor,Alan M., 2004.
"Global Capital Markets,"
Cambridge University Press, number 9780521633178, December.
- James M. Nason & John H. Rogers, 1999.
"Investment and the current account in the short run and the long run,"
International Finance Discussion Papers
647, Board of Governors of the Federal Reserve System (U.S.).
- Nason, James M & Rogers, John H, 2002. "Investment and the Current Account in the Short Run and the Long Run," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(4), pages 967-86, November.
- Hoffmann, Mathias, 2000.
"Long run recursive VAR models and QR decompositions,"
Discussion Paper Series In Economics And Econometrics
0015, Economics Division, School of Social Sciences, University of Southampton.
- Hoffmann, Mathias, 2001. "Long run recursive VAR models and QR decompositions," Economics Letters, Elsevier, vol. 73(1), pages 15-20, October.
- Takashi Kano, 2003.
"A Structural VAR Approach to the Intertemporal Model of the Current Account,"
Staff Working Papers
03-42, Bank of Canada.
- Kano, Takashi, 2008. "A structural VAR approach to the intertemporal model of the current account," Journal of International Money and Finance, Elsevier, vol. 27(5), pages 757-779, September.
- Nikolaus Wolf & Albrecht O. Ritschl, 2011. "Endogeneity of Currency Areas and Trade Blocs: Evidence from a Natural Experiment," Kyklos, Wiley Blackwell, vol. 64(2), pages 291-312, 05.
- Aguiar, Mark & Gopinath, Gita, 2007. "Emerging Market Business Cycles: The Cycle is the Trend," Scholarly Articles 11988098, Harvard University Department of Economics.
- Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501, December.
When requesting a correction, please mention this item's handle: RePEc:zur:econwp:057. 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: (Marita Kieser)
If references are entirely missing, you can add them using this form.