Replication data for: Effective Exchange Rates and the Classical Gold Standard Adjustment
Principal Investigator(s): View help for Principal Investigator(s) Luis A. V. Catão; Solomos N. Solomou
Version: View help for Version V1
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AER-20040139_replication-files | 12/06/2019 03:34:PM | ||
LICENSE.txt | text/plain | 14.6 KB | 12/06/2019 10:34:AM |
Project Citation:
Catão, Luis A. V., and Solomou, Solomos N. Replication data for: Effective Exchange Rates and the Classical Gold Standard Adjustment. Nashville, TN: American Economic Association [publisher], 2005. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-06. https://doi.org/10.3886/E116058V1
Project Description
Summary:
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Using a new international dataset of trade-weighed exchange rates, this paper highlights a neglected adjustment mechanism in the classical gold standard literature. Since gold-pegged countries traded extensively with economies operating more flexible monetary regimes and where parity change was a common adjustment device to systemic shocks, we show that such parity adjustments induced worldwide swings in nominal effective exchange rates. These translated into real exchange rate variations to which trade balances responded with an average elasticity of unity and in the direction of restoring external disequilibria. We conclude that some nominal exchange rate flexibility thus present in the pre-1914 system was instrumental to international payments adjustment.
Scope of Project
JEL Classification:
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F31 Foreign Exchange
N10 Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: General, International, or Comparative
F31 Foreign Exchange
N10 Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: General, International, or Comparative
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