Fixed Ideas of Money
Small States and Exchange Rate Regimes in Twentieth-Century Europe
This book analyses how seven small European countries dealt with major financial crises in the last hundred years.
Tobias Straumann (Author)
9781107616370, Cambridge University Press
Paperback, published 30 January 2014
414 pages
22.8 x 15.2 x 2.4 cm, 0.634 kg
'A rich and thought-provoking study, which puts the monetary history of small European states into a new perspective. Straumann forcefully argues that size matters for monetary policy choices, for reasons far beyond the degree of economic integration.' Nikolaus Wolf, University of Warwick
Most European countries are rather small, yet we know little about their monetary history. This book analyses for the first time the experience of seven small states (Austria, Belgium, Denmark, The Netherlands, Norway, Sweden, and Switzerland) during the last hundred years, starting with the restoration of the gold standard after World War I and ending with Sweden's rejection of the Euro in 2003. The comparative analysis shows that for the most part of the twentieth century the options of policy makers were seriously constrained by a distinct fear of floating exchange rates. Only with the crisis of the European Monetary System (EMS) in 1992–3 did the idea that a flexible exchange rate regime was suited for a small open economy gain currency. The book also analyses the differences among small states and concludes that economic structures or foreign policy orientations were far more important for the timing of regime changes than domestic institutions and policies.
Introduction
Part I. The Interwar Years: 1. Early divergence
2. The return to prewar parity
3. Fear of experiments
4. The dissolution of the gold bloc
Part II. After Bretton Woods: 5. Fixed vs. floating
6. Hard and soft pegs
7. The Swiss exception
8. Floating in the north
Conclusion.