Competitive devaluations in the 1930s: myth or reality?
Ljungberg, Jonas LU
(2024)
In Cliometrica
18(1).
p.151-189
- Abstract
- This article is the first examination of competitive devaluation in the 1930s using data on exchange rates. It analyses the impact of currency changes on foreign trade flows of fourteen industrialized countries 1929–1939. It reviews the development of nominal and real effective exchange rates together with trade and economic growth and conducts a disaggregated analysis of trade and bilateral exchange rates with trade partners. Tests show that the beggar-thy-neighbour effects of exchange rate adjustments were few and temporary. Moreover, it is argued that currency depreciations were expansionary not only for countries that devalued but for the international economy as a whole. This argument draws on Ragnar Nurkse (Nurkse, International... (More)
- This article is the first examination of competitive devaluation in the 1930s using data on exchange rates. It analyses the impact of currency changes on foreign trade flows of fourteen industrialized countries 1929–1939. It reviews the development of nominal and real effective exchange rates together with trade and economic growth and conducts a disaggregated analysis of trade and bilateral exchange rates with trade partners. Tests show that the beggar-thy-neighbour effects of exchange rate adjustments were few and temporary. Moreover, it is argued that currency depreciations were expansionary not only for countries that devalued but for the international economy as a whole. This argument draws on Ragnar Nurkse (Nurkse, International currency experience, Lessons of the Inter-War Period. League of Nations, 1944) who undeservingly has been associated with the notion of “competitive devaluation”. Nurkse showed that currency depreciations increased global monetary reserves, an observation that has gone remarkably overlooked in the literature. (Less)
- Abstract (Swedish)
- Valutadeprecieringarna som följde på guldmyntfotens upplösning stimulerade den internationella ekonomin. Artikeln visar att länder som deprecierade endast tillfälligt eller inte alls fick fördelar på bekostnad av konkurrentländerna. Valutadeprecieringen ökade guldets värde och därmed de monetära reserverna, vilket gynnade återhämtningen från depressionen även för de länder som inte deprecierade. Det råder konsensus om att länder som tidigt lämnade guldmyntfoten återhämtade sig snabbare, men det är vanligt att påstå att detta skedde på bekostnad av dem som lämnade guldmyntfoten senare. Artikeln visar att detta påstående är felaktigt och att alla fick draghjälp av valutadeprecieringen.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/f78ca579-abf6-4345-9905-c957dc2d95c8
- author
- Ljungberg, Jonas
LU
- organization
- alternative title
- Konkurrerande devalveringar på 1930-talet: myt eller verklighet?
- publishing date
- 2024
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- interwar; Europe; exchange rates, trade, depression, Interwar, Europe, Exchange rates, Trade, Depression, E4, F4, N1, N12, N14
- in
- Cliometrica
- volume
- 18
- issue
- 1
- pages
- 39 pages
- publisher
- Springer
- external identifiers
-
- scopus:85144215063
- ISSN
- 1863-2513
- DOI
- 10.1007/s11698-022-00262-9
- language
- English
- LU publication?
- yes
- id
- f78ca579-abf6-4345-9905-c957dc2d95c8
- date added to LUP
- 2023-01-11 14:40:09
- date last changed
- 2024-01-09 15:47:51
@article{f78ca579-abf6-4345-9905-c957dc2d95c8,
abstract = {{This article is the first examination of competitive devaluation in the 1930s using data on exchange rates. It analyses the impact of currency changes on foreign trade flows of fourteen industrialized countries 1929–1939. It reviews the development of nominal and real effective exchange rates together with trade and economic growth and conducts a disaggregated analysis of trade and bilateral exchange rates with trade partners. Tests show that the beggar-thy-neighbour effects of exchange rate adjustments were few and temporary. Moreover, it is argued that currency depreciations were expansionary not only for countries that devalued but for the international economy as a whole. This argument draws on Ragnar Nurkse (Nurkse, International currency experience, Lessons of the Inter-War Period. League of Nations, 1944) who undeservingly has been associated with the notion of “competitive devaluation”. Nurkse showed that currency depreciations increased global monetary reserves, an observation that has gone remarkably overlooked in the literature.}},
author = {{Ljungberg, Jonas}},
issn = {{1863-2513}},
keywords = {{interwar; Europe; exchange rates, trade, depression; Interwar; Europe; Exchange rates; Trade; Depression; E4; F4; N1; N12; N14}},
language = {{eng}},
number = {{1}},
pages = {{151--189}},
publisher = {{Springer}},
series = {{Cliometrica}},
title = {{Competitive devaluations in the 1930s: myth or reality?}},
url = {{http://dx.doi.org/10.1007/s11698-022-00262-9}},
doi = {{10.1007/s11698-022-00262-9}},
volume = {{18}},
year = {{2024}},
}