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...

In 1867, the "Compromise" between Austria and Hungary laid the foundation of a single currency system with a common central bank. As in today's euroland, each part of the monarchy remained sovereign in fiscal matters. Moreover, the borrowing needs of both parts of the monarchy were quite large,...

This Paper argues that the backbone of the pre-1914 international financial architecture was the concern about moral hazard. No decentralized system can leave without safeguards against free riding and this typically means that problem countries must find by themselves the means to fix their...

In this Paper we focus on the different historical regime experiences of the core and the periphery. Using conventional Feldstein-Horioka tests, but taking a more careful look at the panel properties of our sample, this Paper reports results which are consistent with the ‘Folk’ wisdom that...

We explore the efficiency of the forward reichsmark market in Vienna between 1876 and 1914. We estimate ARIMA models of the spot exchange rate in order to forecast the one-month-ahead spot rate. In turn we compare these forecasts to the contemporaneous forward rate, i.e., the market’s forecast...

Avec la Première Guerre mondiale commencent à la fois le XXe siècle et la fin d'une période d'internationalisation économique et de régulation des déséquilibres par le marché : la crise de 1929 et la Seconde Guerre mondiale renforcent cette marche à l'étatisation des institutions de...

This paper considers what we argue was the first experiment of an exchange rate band. This experiment took place in Austria-Hungary between 1896 and 1914. The rationale for introducing this policy rested on precisely those intuitions that modern target zone literature has recently emphasized:...