EconPapers    
Economics at your fingertips  
 

The Price of Stability. The balance sheet policy of the Banque de France and the Gold Standard (1880-1914)

Guillaume Bazot (), M. D. Bordo and Eric Monnet ()

Working papers from Banque de France

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 and continuously violate the “rules of the game”? 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. This policy provides a striking example of a central bank that uses its balance sheet to block the interest rate channel and protect the domestic economy from international constraints (Mundell’s trilemma).

Keywords: gold standard; Bank of France; discount rate; central banking; money market. (search for similar items in EconPapers)
JEL-codes: D41 E30 B41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-his, nep-mac and nep-mon
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
https://publications.banque-france.fr/sites/defaul ... g-paper_510_2014.pdf (application/pdf)

Related works:
Working Paper: The Price of Stability: The balance sheet policy of the Banque de France and the Gold Standard (1880-1914) (2014) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:510

Access Statistics for this paper

More papers in Working papers from Banque de France Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS. Contact information at EDIRC.
Bibliographic data for series maintained by Michael brassart ().

 
Page updated 2019-11-08
Handle: RePEc:bfr:banfra:510