The Euro: 'As bad as gold'? An examination into the Euro Crisis through the eyes of the gold standard literature
(2013) NEKN01 20131Department of Economics
- Abstract
- This paper examines whether monetary autonomy can explain the divergence in
macroeconomic performance between Euro and Non-Euro countries across the OECD since 2007. The paper also provides a short overview on the gold standard literature. Historical, empirical, and theoretical accounts of the Great Depression have mainly revealed that the economic downturn in the 1930s was largely of monetary nature. More specifically, monetary policy was constrained by the peg to gold. Countries off gold, however, were able to pursue expansionary policies and their economic performance during the 1930s was thus far superior. Euro countries face somewhat similar constraints when it comes to monetary policy. The current Euro Crisis has striking... (More) - This paper examines whether monetary autonomy can explain the divergence in
macroeconomic performance between Euro and Non-Euro countries across the OECD since 2007. The paper also provides a short overview on the gold standard literature. Historical, empirical, and theoretical accounts of the Great Depression have mainly revealed that the economic downturn in the 1930s was largely of monetary nature. More specifically, monetary policy was constrained by the peg to gold. Countries off gold, however, were able to pursue expansionary policies and their economic performance during the 1930s was thus far superior. Euro countries face somewhat similar constraints when it comes to monetary policy. The current Euro Crisis has striking similarities to the Great Depression when it comes to both the
buildup of the crisis as well as its progression. Using an estimation method from the gold standard literature, this paper finds that Euro countries (and Euro-pegs) have indeed performed significantly worse than Non-Euro countries. Furthermore, the better performance of the latter can largely be explained by their monetary autonomy. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/4024740
- author
- Probst, Julius LU
- supervisor
- organization
- course
- NEKN01 20131
- year
- 2013
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Euro Crisis, Great Depression, monetary policy, exchange rate, macroeconomic performance
- language
- English
- id
- 4024740
- date added to LUP
- 2013-09-23 13:37:05
- date last changed
- 2013-09-23 13:37:05
@misc{4024740, abstract = {{This paper examines whether monetary autonomy can explain the divergence in macroeconomic performance between Euro and Non-Euro countries across the OECD since 2007. The paper also provides a short overview on the gold standard literature. Historical, empirical, and theoretical accounts of the Great Depression have mainly revealed that the economic downturn in the 1930s was largely of monetary nature. More specifically, monetary policy was constrained by the peg to gold. Countries off gold, however, were able to pursue expansionary policies and their economic performance during the 1930s was thus far superior. Euro countries face somewhat similar constraints when it comes to monetary policy. The current Euro Crisis has striking similarities to the Great Depression when it comes to both the buildup of the crisis as well as its progression. Using an estimation method from the gold standard literature, this paper finds that Euro countries (and Euro-pegs) have indeed performed significantly worse than Non-Euro countries. Furthermore, the better performance of the latter can largely be explained by their monetary autonomy.}}, author = {{Probst, Julius}}, language = {{eng}}, note = {{Student Paper}}, title = {{The Euro: 'As bad as gold'? An examination into the Euro Crisis through the eyes of the gold standard literature}}, year = {{2013}}, }