This Paper seeks to trace the impact of monetary arrangements on trade integration and business cycle correlation, focusing on Europe in the late 19th century period as a guide for modern debates. For this purpose, we first estimate a gravity model and show that monetary arrangements were...

Dans cet article, nous mettons en évidence que l'étalon or se présente comme une gigantesque accumulation de dettes publiques et nous dégageons plusieurs hypothèses relatives aux facteurs réels et monétaires ayant permis cette accumulation. En second lieu, en nous concentrant sur les «...

This paper examines the historical record of the Austro-Hungarian monetary union, focusing on its bargaining dimension. As a result of the 1867 Compromise, Austria and Hungary shared a common currency, although they were fiscally sovereign and independent entities. By using repeated threats to...

Textbook accounts of the Anglo-French trade agreement of 1860 argue that it heralded the beginning of a liberal trading order. This alleged success has much interest from a policy point of view: unlike modern GATT/WTO multilateral agreements, it rested on bilateral negotiations. But, in reality,...

This paper challenges a popular explanation for ‘original sin’ – the default prone borrowing of long term debt in foreign exchange by emerging markets – that emphasizes the lack of credibility and commitment of governments, that prevents them from borrowing in their own currency. Basing...

The gold standard was a system of fixed exchange rates that offered little opportunity for carrying out monetary policies, short of suspending gold convertibility. Trade integration and capital mobility were very high. It is worthwhile asking whether there are useful lessons to draw for EMU from...

This paper discusses the existence of 'home' biases in the 19th century global capital market, whereby colonies appear to have received a 'disproportionate' amount of capital from their metropolis. Starting from a discussion of the Bulow Rogoff (1989) problem, we argue that imperial links...

A natural experiment with an exchange-rate band in Austria-Hungary in the early 20th century provides a rare opportunity to discuss critical aspects of the theory of target zones. Providing a new derivation of the target zone model as a set of nested hypotheses, the inference is drawn that...

Dans quelle mesure les règles formelles d'une organisation monétaire influencent-elles les comportements, et dans quelle mesure la combinaison de ces comportements définit-elle l'organisation ? Ou encore, est-il possible de qualifier les pratiques des agents et des institutions sans faire...

The first known experiment with an exchange rate band took place in Austria- Hungary between 1896 and 1914. The rationale for introducing this policy rested on precisely those intuitions that the modern literature has emphasized: the band was designed to secure both exchange rate stability and...