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Effective exchange rates 1879-1913

2000; Oxford University Press; Volume: 4; Issue: 3 Linguagem: Inglês

10.1017/s1361491600000113

1474-0044

Solomos Solomou, Luis Catão,

Global Financial Crisis and Policies

This article constructs nominal and real multilateral effective exchange rates for Britain, France, Germany and the US during the period of the classical Gold Standard, 1879–1913. The new data indicate that the major industrial countries saw trend variations in their nominal effective rates, which appear to have been stochastic in nature, and reflected a significant exchange rate variation with non-gold countries. The movements of nominal effective rates display common trend patterns across the major industrial countries, reflecting similar trading structures in the pre-1914 period. In contrast, the movements of the real effective rates reflect national-specific influences. The implications of the new data with regard to business cycles and the international adjustment mechanism under the Gold Standard are considered.