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Latin American Experiments in Central Banking at the Onset of the Great Depression

Number of pages32
PublisherGeneva : Paul Bairoch Institute of Economic History
Collection
  • Economic History Working Papers; 4/2021
Publication date2021
Abstract

This chapter analyzes the role of central banks during the first years of the Great Depression. The literature has focused on central banks' loss of autonomy and on the implementation of innovative, countercyclical monetary policies which fostered economic recovery but also led to higher rates of inflation and exchange rate volatility. However, we show that these kinds of policies had been foreseen by foreign advisors before and during the crisis. Policymakers had been reluctant to implement them due to the fear of a loss of credibility for the gold standard regime. Furthermore, we show that in most cases this shift was short-lived and central banks could avert, to a large extent, the problem of fiscal dominance. Central banks became effective actors, channeling credit to the real economy and also supporting the emergence of state institutions that would promote the development of local industry.

Keywords
  • Central banking
  • Great Depression
  • Gold standard
  • Money doctors
  • Financial crises
Classification
  • JEL : N0
Citation (ISO format)
FLORES ZENDEJAS, Juan, NODARI, Gianandrea. Latin American Experiments in Central Banking at the Onset of the Great Depression. 2021
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Working paper
accessLevelPublic
Identifiers
  • PID : unige:152742
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Technical informations

Creation06/28/2021 3:22:00 PM
First validation06/28/2021 3:22:00 PM
Update time03/16/2023 12:50:23 AM
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