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RESUMO No século XVII, o fenômeno monetário era central para o entendimento da economia, notadamente no Mundo Ibérico, onde os fluxos de metais americanos exigiam uma posição sobre seu impacto nas atividades mercantis e produtivas, e na sua articulação com o comércio ultramarino e a gestão das economias coloniais. Este trabalho procura entender os impasses da política monetária filipina para o reino e o Império de Portugal. A União de 1580 manteve, além das “leis, estilos, liberdades, isenções, casa Real e ofícios” da Coroa portuguesa, a moeda com cunho português. Assim, Filipe II permitia que o seu direito exclusivo (regalia) de cunhar a moeda fosse interpretado na mesma chave da conservação da identidade econômica e jurídica de Portugal. Durante todo o período, os Filipes não alteraram o valor da moeda portuguesa, estabilizando o câmbio do real em relação às outras unidades de conta europeias. A chegada em grande quantidade da prata americana, por outro lado, permitia a expansão do meio circulante de Castela, que acabou, no período, intoxicando o meio circulante português. Esse arranjo instável coloca as bases para a transformação que se seguirá no período da Restauração, com sucessivas mutações monetárias. ABSTRACT In the seventeenth century, the monetary phenomenon was central to the understanding of the economy. Notably, in the Iberian World, where the flows of metals of America demanded a position on their impact on the mercantile and productive activities, and their articulation with the overseas trade and the management of the colonial economies. This work tries to understand the dilemmas of the monetary policy of the Habsburgs for the kingdom and the Empire of Portugal. The Union of 1580 maintained, in addition to the “laws, styles, freedoms, exemptions, royal house and offices” of the Portuguese Crown, the Portuguese currency. Thus, Philip II allowed his exclusive right to coinage to be interpreted in the same key of the conservation of the economic and juridical identity of Portugal. Throughout the period, the Philips did not change the value of the Portuguese currency, stabilizing the exchange rate of the real against the other European units of account. The large arrival of American silver, on the other hand, allowed the expansion of the monetary mass in Castile that ended up intoxicating the Portuguese circulating medium. This unstable arrangement puts the foundations for the transformation that will follow in the Restoration period, with successive monetary devaluations. RESUMEN En el siglo XVII, el fenómeno monetario era central para el entendimiento de la economía. Notoriamente, en el Mundo Ibérico, donde los flujos de metales americanos exigían una posición sobre su impacto en las actividades mercantiles y productivas, y en su articulación con el comercio ultramarino y la gestión de las economías coloniales. Este trabajo pretende entender los impases de la política monetaria filipina para el reino y el Imperio de Portugal. La unión de 1580 mantuvo, además de las “leyes, estilos, libertades, exenciones, casa Real y oficios” de la Corona portuguesa, la moneda con cuño portugués. Así, Felipe II permitía que su derecho exclusivo (regalía) de acuñar la moneda fuese interpretado en la misma llave de la conservación de la identidad económica y jurídica de Portugal. Durante todo el periodo, los Filipes no alteraron el valor de la moneda portuguesa, estabilizando el cambio del real en relación a las otras unidades de cuenta europeas. La llegada en gran cantidad de plata americana, por otro lado, permitía la expansión del medio circulante de Castilla que acabó, en el periodo, intoxicando el medio circulante portugués. Este arreglo instable coloca las bases para la transformación que se seguirá en el periodo de la Restauración, con sucesivas mutaciones monetarias.

Changing the value of money was used, from the first moment of the Restoration, as a means of financing war and monarchy. Absent in the Philippine period, when there was stability in the Portuguese monetary standard, the mutationist practice was seen as unwanted, dangerous, and immoral. Nevertheless, the needs of the time led the monarchy to delegate its monetary policy to the Conselho da Fazenda (Treasury Council), where thinking about the currency was not only adequate to the needs of power games, but also adjusted to the new ideas, especially those originating from the so-called Salamanca School. Studying the first mutating initiatives (1640-42) allows us to understand how monetary practices evolved in Portugal to a policy of adjustment and resurgence of the national monetary system., A alteração do valor da moeda foi utilizada, desde o primeiro momento da Restauração, como instrumento de financiamento da guerra e da monarquia. Ausente no período filipino, quando se verificou uma estabilidade do padrão monetário português, a prática mutacionista era vista como indesejada, perigosa e imoral. Não obstante, as necessidades do tempo levaram a monarquia a delegar as experiências nas alterações do sistema monetário para o Conselho da Fazenda, onde o pensamento sobre a moeda estava não só adequado às necessidades dos jogos do poder, mas ajustado também às novas ideias, sobretudo aquelas com origem na chamada Escola de Salamanca. Estudar as primeiras iniciativas mutacionistas (1640-1642) permite-nos perceber como evoluíam as práticas monetárias em Portugal para uma política de ajuste e ressurgimento do sistema monetário nacional.

Given that the characteristics of the sets of means of payment available to economic agents at a given moment supply decisive information about the degree of monetization of the economy, this paper first proposes a technique to analyse these characteristics, considering their amplitude, purchasing power and density, and then applies that technique to the evolution of the monetary system of Portugal in the course of its existence as an independent country. The Portuguese case is an interesting standard for international comparisons, because it evolved over a very long time span, and sharply different degrees of monetization may be identified within it: (i) an epoch of low or negligible monetization (12th-15th century); (ii) monetization of a significant and gradually increasing part of the economy (15th19th century); and (iii) almost full monetization (19th century on). info:eu-repo/semantics/publishedVersion

I assess the stability of the monetary environment in Switzerland over the past two centuries. In order to control for transitory measurement errors, in particular in nineteenth century data, I use an unobserved-components stochastic-volatility model to extract the permanent trends from several nominal variables. The descriptive analysis of these trends suggests that the current monetary regime, flexible inflation targeting, provided a relatively stable monetary environment. Although the trends are quite stable for the nineteenth century, the estimates are imprecise. We should therefore be cautious when characterizing metal currency regimes as providing a stable monetary environment. A discussion of the results shows that the apparent success of flexible inflation targeting poses new challenges for the implementation of monetary policy because the trend decline in inflation was associated with a trend decline in nominal interest rates.

This dissertation studies the role of sterling during the Bretton Woods period (1944-1971). The Bretton Woods system has often been described as a dollar system with sterling having lost its relevance as reserve currency. However, despite being a secondary reserve currency and having lost importance, sterling was the ‘first line of defence for the dollar’ as contemporaries put it. They frequently stressed the fact that a sterling crisis would have consequences on the stability of the Bretton Woods system but economic historians have never tested this empirically. This dissertation argues that sterling played an important role in the stability of the international monetary system. Foreign exchange market participants globally monitored sterling and US policymaker stepped in to avoid devaluation of the British currency. US support to sterling was mainly due to the fear of a British devaluation, which could trigger a run on the dollar. When the UK finally devalued the pound in 1967, it marked the beginning of an instable period for the international monetary system. The Gold Pool, a syndicate to defend the US gold parity, collapsed in 1968 and this prefigured the end of the Bretton Woods system. This dissertation presents new data along with novel archival material from seven archives across continents to demonstrate how contagion from sterling to the dollar occurred. Modern econometric methods are used to analyse a new dataset with over 80,000 observations of offshore exchange rates, central bank intervention and reserves. This evidence shows that a secondary reserve currency can still play a key role in the stability of the international monetary system., ESRC full fellowship grant number KFW/10324121/0

The British monetary authorities have traditionally focused on broader monetary aggregates than their counterparts elsewhere. The reasons include: the willingness of UK banks to allow customers to make payments by drawing on time deposits, the particularities of the UK approach to managing the national debt and the foreign exchange reserves, and the flow-of-funds system of national accounts developed after World War II. This article outlines these reasons, and explores the implications for the UK's often fractious relationship with the International Monetary Fund during the 1950s and 1960s. It explains why IMF conditionality on loans to the UK focused on broad aggregates.

This paper presents a new view on the gold price of greenbacks during and after the American Civil War by analyzing exchange-rate volatility rather than exchange-rate levels. Our empirical investigation detects regimes of high and low volatility alternating in a way that is consistent with a theoretical exchange-rate model in which the rate is primarily driven by investors' expectations and not by fundamentals. We interpret these findings as evidence that monetary policy makers were surprisingly able to credibly announce the resumption to gold half a year before it actually took place on January 1, 1879. Given the intense political debate about the appropriate design of the United States' financial system, this is a remarkable result. It indicates that the policy makers' ability to anchor investors' expectations is relevant to achieving asset-price stability as well as effectiveness of financial market regulation. The insights from this historical episode should therefore be of interest to policy makers and regulators combating financial crises like the ongoing current debt crises worldwide. (C) 2013 Elsevier B.V. All rights reserved.

The aim of this article is to analyze the monetary initiatives which the government of San Martín was forced to implement in order to resolve its peculiar monetary paradox: machines without silver. The Banco Auxiliar de Papel Moneda played a central role in the new orientation of monetary policy, opening up debates which continued beyond the span of its brief and tortuous existence. Attempts at reform were eventually neutralized and ruined by errors in the initial approach to the problem, an absence of objective conditions and highly questionable management.El objeto del presente artículo es analizar las iniciativas monetarias que el gobierno de San Martín tuvo que desarrollar para resolver su peculiar paradoja monetaria: máquinas sin plata. El Banco Auxiliar de Papel Moneda desempeñó un papel central en la nueva orientación de la política monetaria, abriendo debates más allá de su breve y tortuosa existencia. Finalmente, errores de planteamiento, ausencia de condiciones objetivas y una gestión más que discutible, acabaron por ahogar y neutralizar los pretendidos esfuerzos reformistas.

This paper documents nominal stability in Switzerland from 1805 to 2013 using a data set on annual price, wage and nominal GDP changes. The trends of these indicators are estimated by an unobserved-components stochastic-volatility model in order to control for short-term fluctuations and measurement error. Based on a narrative analysis of these trends five main findings emerge. (i) Fiat currency regimes in Switzerland provided a relatively stable monetary background even compared to the metal-currency regimes before WW1. (ii) The flexible inflation targeting regime adopted in December 1999 has performed best over the last two centuries measured by today’s definition of nominal stability. (iii) Fiat currency regimes without clearly communicated nominal price anchor (Bretton Woods System and monetary targeting) were characterised by an inflation bias. (iv) The metal-currency regimes (competing currencies and bimetallism before World War 1, and to some extent flexible inflation targeting, were associated with a deflation bias. (v) Persistent deflations in terms of the CPI only occurred under metallic regimes before WW2. These episodes were accompanied by falling nominal GDP, falling employment but relatively stable hourly wages., KOF Working Papers, 379

The second half of the eighteenth century was a period of major transformations in the colonial economies.The monetary system was not an exception. This paper contributes to the analysis of such variations, examining two aspects of the monetary policy of the Bourbons: the debasement and the recoinage. For this, the currency amounts that agents took to the Nueva Granada mints to be reminted were reconstructed and the incentives that the Crown provided for that operation were analyzed. The results show that both measures altered the composition but not the size of the money supply. Thus, although the new coinage reduced transaction costs, the debasement prevented the currency in circulation to get unified. It was also found that the circulation of silver coins was important despite of the fact that the viceroyalty was a gold-producing economy. Finally, it is argued that both measures affected in different ways the behavior of variables such as inflation, low-denomination coins and the Gresham's law.

Modern central banks have come to view payment systems as a key area of strategic interest, both as part of their responsibilities for financial stability and for the implementation of monetary policy. By considering the evolution of interbank settlement arrangements and central banking functions in the context of a number of diverse historical country case studies, this paper seeks to improve understanding of the development of, and reasons for, central banks’ current roles. Starting from a situation where the earliest banks gradually began to accept claims on each other, banks introduced a variety of innovations to clear and settle between themselves more efficiently. Focusing particularly on the lender of last resort function – a key characteristic of a central bank – this paper explores whether institutions at the centre of clearing and settlement arrangements developed central bank-like characteristics.