EH.Net Abstracts in Economic History

              EHS Abstract Submission
                    (c) 1997 EH.Net
-----------------------------------------------------------
              Name:  Michael D. Bordo
               Email:  bordo at fas-econ.rutgers.edu
         Institution:  Rutgers University  

         Co-author:  Ronald MacDonald, University of Strathclyde  

             Title:  The "Rules of the Game" and the Credibility
of the Classical Gold Standard, 1880-1914  

  Internet Address
of abstracted work:	Not available on the Internet  

           By mail:  
                     Department of Economics
                     P.O. Box 5055 New Jersey Hall
                     Rutgers University
                     New Brunswick NJ 08903-5055 
                     USA
 
          Language:  English
 
          Abstract:
   This paper examines the recently noted finding that the
classical gold standard represented a credible, well-behaved,
target zone system from the perspective of the well-documented
failure of countries today by the rules of the game in the
classical period.  In particular, we test a hypothesis of
Svennson (1994) that a credible target zone can confer on a
country a degree of independence in the operation of its monetary
policy.  We propose a number of ways of testing this proposition
and implement them for a newly created monthly data base over the
period 1880-1913.  We demonstrate that the classical gold
standard worked in the way predicted by Svennson's model.  This
would seem to have an important bearing on the kind of
institutional framework required for a modern-day target zone
(such as the exchange rate mechanism) to function effectively
and, in particular, to weather speculative attacks.

 
      Bibliography:  Bordo, Michael D., and Ronald MacDonald.
"The "Rules of the Game" and the Credibility of the Classical
Gold Standard, 1880-1914." Paper presented at the third World
Congress of Cliometrics, Munich, Germany, July 1997.
 
                  Subject:  H
 Geographical Area:  0
      Country/Region:  Comparative
           Time Period:  7, 8


------------------------------------------------------- 
Visit the library of Abstracts in Economic History or submit your
abstract at: http://www.eh.net/AEH