DP6685 Scylla and Charybdis. Explaining Europe?s Exit from Gold, January 1928- December 1936
|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.