Advanced

Inflation and switches between specie and paper standards in Sweden 1668-1931 : A public finance interpretation

Fregert, Klas LU and Jonung, Lars LU (1996) In Scottish Journal of Political Economy 43(4). p.444-467
Abstract
In this study, the recent literature on the integration of fiscal and monetary policy is used to examine the suspensions and resumptions of currency convertibility in Sweden during the period 1668-1931. We demonstrate that urgent demands for financing of war expenditures forced the Swedish Riksbank to abandon convertibility of its notes in all cases of suspensions prior to 1914. We argue that the suspension periods should be regarded as unexpected lapses into discretion from rule-bound convertibility regimes rather than as part of an optimal ex ante public finance policy. All resumptions of convertibility, except for the resumption of 1924, implied an ex post formal devaluation. All suspensions were illegal, except in 1931 when a... (More)
In this study, the recent literature on the integration of fiscal and monetary policy is used to examine the suspensions and resumptions of currency convertibility in Sweden during the period 1668-1931. We demonstrate that urgent demands for financing of war expenditures forced the Swedish Riksbank to abandon convertibility of its notes in all cases of suspensions prior to 1914. We argue that the suspension periods should be regarded as unexpected lapses into discretion from rule-bound convertibility regimes rather than as part of an optimal ex ante public finance policy. All resumptions of convertibility, except for the resumption of 1924, implied an ex post formal devaluation. All suspensions were illegal, except in 1931 when a constitutional escape clause was invoked. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
in
Scottish Journal of Political Economy
volume
43
issue
4
pages
24 pages
language
English
LU publication?
yes
id
0f1b5d25-dabe-4ff5-adcf-3045e24b6428
alternative location
https://www.scopus.com/inward/record.uri?eid=2-s2.0-0009152759&partnerID=40&md5=dac63e2adc9c8041660fa43e35c69e09
date added to LUP
2017-02-23 10:39:35
date last changed
2017-08-25 04:00:11
@article{0f1b5d25-dabe-4ff5-adcf-3045e24b6428,
  abstract     = {In this study, the recent literature on the integration of fiscal and monetary policy is used to examine the suspensions and resumptions of currency convertibility in Sweden during the period 1668-1931. We demonstrate that urgent demands for financing of war expenditures forced the Swedish Riksbank to abandon convertibility of its notes in all cases of suspensions prior to 1914. We argue that the suspension periods should be regarded as unexpected lapses into discretion from rule-bound convertibility regimes rather than as part of an optimal ex ante public finance policy. All resumptions of convertibility, except for the resumption of 1924, implied an ex post formal devaluation. All suspensions were illegal, except in 1931 when a constitutional escape clause was invoked.},
  author       = {Fregert, Klas and Jonung, Lars},
  language     = {eng},
  number       = {4},
  pages        = {444--467},
  series       = {Scottish Journal of Political Economy},
  title        = {Inflation and switches between specie and paper standards in Sweden 1668-1931 : A public finance interpretation},
  volume       = {43},
  year         = {1996},
}