The limits of internal devaluation: Switzerland during the great depression

Swiss Journal of Economics and Statistics

Original Article

Ulrich Woitek¹  Tobias Straumann¹  Peter Rosenkranz² 

[1] Department of Economics, University of Zurich, Zürichbergstrasse 14, CH-8032, Zürich, Switzerland;Public Management, Financial Sector & Regional Cooperation Division, East Asia Department, Asian Development Bank, 6 ADB Avenue, 1550, Mandaluyong City, Metro Manila, Philippines;

关键词: Great Depression;    Switzerland;    New Keynesian business cycle model;    E12;    E32;    N14;   

DOI  :  10.1186/s41937-022-00100-9

 received in 2021-09-10, accepted in 2022-11-15,  发布年份 2022

来源: Springer

【 摘 要 】

During the Great Depression, countries endowed with abundant gold reserves were not able to leave the gold standard and devalue their currencies until the mid-1930s. Instead, they were forced to go down the road of internal devaluation. We analyze the policies of the Swiss authorities by estimating a New Keynesian small open economy model. Our results show that the long adherence to the gold standard and the failure of internal devaluation imposed considerable costs on the Swiss economy. Moreover, counterfactual exercises suggest that a timely devaluation would have led to an early recovery from the Great Depression.

【 授权许可】

CC BY   
© The Author(s) 2022

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