Suchergebnisse

Paper presented at: The Seventh Conference of the European Historical Economics Society (EHES), University of Lund (Sweden), 29 June- 1 July 2007 ; Paper presented at: Third Iberian Economic History Workshop: Iberometrics III, Valencia, March 23-24, 2007 ; Both fiscally responsible and irresponsible governments may have fiscal reaction functions which reduce or increase the amplitude and duration of business cycles. This, we suggest, is the key to the pattern of Iberian fluctuations in economic activity since 1945. Underlying these functions are political settlements or their absence; Traumatic political histories or shocks destroy the basis for stabilising fiscal policies. Stability, political ingenuity and luck can create this basis. Whereas in Spain, the ministers behind the 1959 Stabilisation Plan managed eventually to tame the excesses of a militarily directed economy, and the dictator ensured a transition that kept the army's loyalty, the opposite path was followed in Portugal. Fiscal prudence allowed authoritarian Portugal to match Spain's spectacular growth rates of the 1950s and 1960s without economic crises, but failure to secure the army prevented a smooth transition from dictatorship. In consequence Portugal experienced more extreme downturns and budgetary policies than Spain after 2000, and the Maastricht/EMU shocks. The two countries followed crossing paths. Macroeconomic instability prevailed in Spain under at least the early Franco, whereas smoothed adjustments (in spite of stronger external shocks) characterized the economy after the democratic transition. The reverse can be observed in Portugal, where macroeconomic stability under the Estado Novo gave way to dramatic fluctuations after the 1974 revolution.

Primitive and Non-metallic Money -- Monetary System of Ancient Asia: China -- Monetary System of the Ancient Regime -- Medieval Debasement and Seigniorage -- Gresham's Law -- Flows of Precious Metals and Prices in Europe -- Rise and Decline of the Global Silver Standard -- Money, Trade, and Payments in Pre-industrial Europe -- Money Markets and Exchange Rates in Pre-industrial Europe.

Abstract
The Spanish Second Republic was a unique experiment of democratization in interwar Europe, which was characterized by extreme levels of political uncertainty. We find that investors responded to shifts in uncertainty by selling stocks in favor of government bonds—a behavior known as flight-to-safety. Additionally, we find that political uncertainty caused stock market stress and induced significant differences in the cross-section of expected stock returns, consistent with the exposures to political uncertainty. The fact that investors recurrently scuttled to shelter into government bonds suggests that they did not perceive a radical change in the political regime as an immediate and credible threat.

We explain how governments contributed and responded to fluctuations in economic activity in Europe during the second half of the twentieth century. In the second section we sketch the basic ideas essential to understanding the relationship between economic policy and business cycles. They include the notion that monetary and fiscal policies influence fluctuations in output, employment, and inflation according to the financial openness of the economy (free capital flows versus capital controls), as well as the currency regime chosen by policy makers (pegged versus flexible exchange rates). We also document the timing of financial liberalization in Europe and the persistent preference of most European governments for pegged exchange rate regimes over the entire period. We then examine the evolution of basic features of cycles in Europe, such as volatility and synchronization. We note the falling volatility of cycles in the 1960s and from the mid-1980s until 2007, explaining why changes in economic policy making were a fundamental driver. In the next section we support this analysis with narratives of the responses of national governments and central bankers to cyclical fluctuations before and after the global recession of 1974-5. Finally we look briefly at the historical and recent experience of eastern Europe, assessing the area's reintegration from 1989 after the long economic decoupling from the rest ofthe continent in 1945

Was Spanish fiscal policy destabilizing? We estimate policy reaction functions and test the impact of fiscal shocks on growth volatility over the period 19501998. We find that a transition from pro-cyclical to countercyclical fiscal policy occurred in the late years of the Franco regime, contributing to the stabilization of the growth pattern. The timing of the shift, between the late 1960s and early 1970s, was not determined by a single policy change, but rather by gradual pressure from economic liberalization, the external constraint imposed by a fixed exchange rate regime and the modernization of fiscal policy instruments. The aggressiveness of fiscal shocks also decreased over time, thus contributing to the progressive stabilization of output growth. There appears to be little necessity to appeal to a 'Great Moderation' of monetary policy to understand the greater stability of the Spanish economy from the 1980s.

In the first age of rapid economic growth after 1945, fluctuations of western European output and employment were so mild that the very notion of a cycle was transformed or even seemed obsolete. A second period of much slower average economic growth was marked by large and frequent oscillations, associated with the oil shocks and the Great Inflation of the 1970s and early 1980s. The last phase, characterized by smooth and ampie swings in output and inflation, has been dubbed the Great Moderation , reflecting the gradual reduction of inflationary trends. Different reasons have been proposed for these changing patterns but a common factor is that the conduct of economic policy was critical. In this paper we survey the evolution of basic features of cycles in Europe, such as volatility and synchronization; explain why changes in economic policy-making were a fundamental driver of changing patterns; and provide analytical narratives of the responses of national governments and central bankers to cyclical fluctuations. Finally we briefly look at the historical and recent experience of Eastern Europe, assessing the área s reintegration from 1989 after the long economic decoupling from the rest of the continent in 1945.