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New paradigms and old promises: central banks and the market for sovereign debt in the interwar period

Number of pages42
PublisherGenève : Paul Bairoch Institute of Economic History
Collection
  • Working Papers of the Paul Bairoch Institute of Economic History; 1/2020
Publication date2020
Abstract

This paper analyses the motives behind the establishment of central banks during the interwar period. We argue that most governments with difficulties in accessing financial markets established central banks, as this was a general recommendation provided by contemporary money doctors. However, even if central banks served to facilitate the issue of foreign loans on the New York financial market, we find that governments with central banks did not obtain more favorable terms for those loans. Our analysis further demonstrates that investors concentrated on macroeconomic achievements such as inflation and monetary stability, and whether a lender-of-last resort facility existed, regardless of whether or not this was pursued by a central bank.

Keywords
  • Money doctors
  • Central banking
  • Great depression
  • Sovereign debt
Classification
  • JEL : N00
Citation (ISO format)
FLORES ZENDEJAS, Juan, LOPEZ SOTO, David, SANCHEZ AMADOR, David. New paradigms and old promises: central banks and the market for sovereign debt in the interwar period. 2020
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Working paper
accessLevelPublic
Identifiers
  • PID : unige:129346
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Creation01/20/2020 12:25:00 PM
First validation01/20/2020 12:25:00 PM
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