DP6685 Scylla and Charybdis. Explaining Europe?s Exit from Gold, January 1928- December 1936
Author(s): | Nikolaus Wolf |
Publication Date: | February 2008 |
Keyword(s): | Europe, Gold-Exchange Standard, Interwar Period |
JEL(s): | E42, E44, N14 |
Programme Areas: | International Macroeconomics |
Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=6685 |
The paper examines the timing of exit from the interwar gold-exchange standard for a panel of European countries, based on monthly data over the period January 1928 - December 1936. I show that the decision of exit from gold can be understood in terms of a trade-off between a quite limited set of factors commonly suggested in the theoretical literature on currency crises. A simple and parsimonious econometric framework that nests various hypotheses allows predicting the very month when a country will exit gold in the 1930s.