Did Monetary Policy Matter? Narrative Evidence from the Classical Gold Standard

Jason Lennard

No 155, Lund Papers in Economic History from Lund University, Department of Economic History

Abstract: This paper investigates the causal effect of monetary policy on economic activity in the United Kingdom between 1890 and 1913. Based on the Romer and Romer (2004) narrative identification approach, I find that following a one percentage point monetary tightening, unemployment rose by 0.8 percentage points, while inflation fell by 2.7 percentage points. In addition, monetary policy shocks accounted for more than a quarter of macroeconomic volatility.

Keywords: business cycles; gold standard; monetary policy; narrative identification (search for similar items in EconPapers)
JEL-codes: E31 E32 E52 E58 N13 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2017-02-28
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Citations: View citations in EconPapers (2)

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Journal Article: Did monetary policy matter? Narrative evidence from the classical gold standard (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:luekhi:0155

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