Ethnic Conflicts and Monetary Integration in Austria-Hungary, 1867-1914

Economic history can offer an independent contribution to the analysis of the conditions of success and the mode of action of different types of monetary integration. Up to now, the debate about the functional mechanisms of monetary unions in the real world has ignored the Habsburg Monarchy. The Monarchy was not only a customs union and a single market with well developed trade, capital and service relations, it was also a currency union with a joint national bank and a joint monetary policy. The paper deals with: Expectations for the new currency regarding competitiveness and opportunities of participation for social groups within Habsburg Monarchy; The construction of the union's order as a determinant or as a condition for success, as well as its conflict potential; and Mechanisms for mastering conflicts in monetary unions including rules for exit, crisis management, flexibility of the order, etc