German and British Monetary Policy, 1919–1932

Theo Balderston

in Banking, Currency, and Finance in Europe Between the Wars

Published in print September 1995 | ISBN: 9780198288039
Published online November 2003 | e-ISBN: 9780191596230 | DOI:
 German and British Monetary Policy, 1919–1932

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Balderston contrasts the exchange rate and monetary policies in Germany with those in Britain. He examines the economic and political determinants of the monetary and fiscal policies adopted in the two countries in the 1920s, and their contrasting attitudes to the defence of the currency under the gold standard. He concludes that although the failure of central banks to cooperate hastened the collapse of the gold standard, it was in each case the uncertainty of market expectations with respect to the currencies that was of primary importance. Given this uncertainty, the level of support needed to maintain confidence in the two parities would have been much larger than in earlier gold standard crises (such as 1890 or 1907), and was probably not feasible.

Keywords: Britain; central banks; currencies; exchange rate; fiscal policy; Germany; gold standard; market expectation; monetary policy; uncertainty

Chapter.  16162 words. 

Subjects: Macroeconomics and Monetary Economics

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