International shocks and the balance sheet of the Bank of France under the classical gold standard

Guillaume Bazot, Michael D. Bordo and Eric Monnet

Explorations in Economic History, 2016, vol. 62, issue C, 87-107

Abstract: Under the classical gold standard (1880–1914), the Bank of France maintained a stable discount rate while the Bank of England changed its rate very frequently. Why did the policies of these central banks, the two pillars of the gold standard, differ so much? How did the Bank of France manage to keep a stable rate despite international constraints? This paper tackles these questions and shows that the domestic asset portfolio of the Bank of France played a crucial role in smoothing international shocks and in maintaining the stability of the discount rate. As a result, the French discount rate was only changed in exceptional circumstances, for which a change in the English rate was not a sufficient condition.

Keywords: E42; E43; E50; E58; N13; N23; Gold standard; Bank of France; Discount rate; Central banking; Money market (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:exehis:v:62:y:2016:i:c:p:87-107

DOI: 10.1016/j.eeh.2016.07.006

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