EUR.MONEY: Core or Periphery? The Credibility of the Austro-Hungarian Currency, 1867-1913

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                ABSTRACTS IN ECONOMIC HISTORY
                     (c) 2001 EH.Net
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Name: Marc Flandreau
Email: flandreau@ofce.sciences-po.fr
Institution: University of Lille and Observatoire Francais des
Conjonctures Economiques

Co-author: John Komlos
jk@econhist.de
University of Munich

Title: Core or Periphery? The Credibility of the Austro-Hungarian
Currency, 1867-1913

Internet Address of abstracted work:
http://www.econhist.de/papers/credibility.pdf

By mail:
Marc Flandreau
Observatoire Francais des Conjonctures Economiques
69 Quai d'Orsay,
75007 Paris, France

Language: English

Abstract:
We explore the history of the Austro-Hungarian currency through the
floating exchange rate regime of the 1870s and 1880s and the adoption
of the gold standard in 1892. Though actual convertibility remained
an elusive dream, the A-H Bank was able to stabilise the currency by
establishing a credible (de facto) shadow-gold standard by 1896.
Though the currency fluctuated by as much as 7% per annum before
1896, credibility was established very quickly, and thereafter the
currency was successfully kept within an informal target zone of
0.4%, despite of the well-known internal (and external) political
problems of the monarchy and in spite of a number of major financial
crisis of foreign origin. This remarkable record positions the Dual
Monarchy squarely in between the elite core and the plebeian
peripheral countries of the time.

Bibliography: Flandreau, Marc and John Komlos. "Core or Periphery?
The Credibility of the Austro-Hungarian Currency, 1867-1913." Working
paper, April 2001.

Subject: H
Geographical Area: 4
Country/Region: Habsburg Monarchy
Time Period: 8

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