Discussion paper
DP799 Real and Monetary Aspects of French Exchange Rate Policy Under the Fourth Republic
This paper studies French exchange rate policy during the 1940s and 1950s from the point of view of two contrasting theories: the theory of collapsing exchange rate regimes and the intertemporal approach to the balance of payments. While the first theory suggests that monetary policy credibility has played a role in French balance of payments crises, the second implies that a more favourable exchange rate should have prevailed, along with more foreign borrowing. The effects of trade controls on growth are also estimated and are found to be negative and significant.
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