History, Economic and Political Relationships, Second Edition
Chapter 9: Forces establishing, maintaining and eroding stable monetary regimes
In this chapter the long-term tendencies to create, to maintain and to abolish inflation-stable monetary regimes will be analysed. We have shown that the presence and absence of long-term inflation as well as its magnitude are determined by the prevailing monetary regime, and also by the technical characteristics of the money used as means of payment. The more the bias of rulers and politicians for inflation could be restricted by a monetary constitution the less inflation resulted. No inflationary bias existed under the gold standard, and even without this regime independent central banks were instrumental in securing lower rates of inflation (Chapter 2). Purely metallic money could not lose its value as much or as quickly as paper money (Chapters 2, 3 and 4). We also answered the question under which conditions inflation-stable monetary regimes could be re-established after mild or moderate inflations (Section 3.3 for metallic currencies, Sections 7.1 to 7.3) or after high inflations (Sections 8.2 to 8.3). These results provided valuable insights. But they did not allow us to answer two remaining questions: 1. Why did inflation-stable monetary regimes like the gold standard arise without the need to get rid of preceding inflations? 2. Under which conditions could they be maintained for long periods, or by which forces were such regimes eroded or abolished? It is a challenging task for the final chapter to analyse these problems.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.