Did Monetary Policy Matter? Narrative Evidence from the Classical Gold Standard

Jason Lennard

doi:10.1016/j.eeh.2017.10.001

Did Monetary Policy Matter? Narrative Evidence from the Classical Gold Standard

Jason Lennard

Department of Economic History

National Institute of Economic and Social Research (NIERS)

Research output: Contribution to journal › Article › peer-review

Abstract

This paper investigates the causal effects of monetary policy on the British economy during the classical gold standard. Based on the narrative identification approach, I find that following a one percentage point monetary tightening, unemployment rose by 0.9 percentage points, while inflation fell by 3.1 percentage points. In addition, monetary policy shocks accounted for a third of macroeconomic volatility.

Original language	English
Pages (from-to)	16-36
Journal	Explorations in Economic History
Volume	68
DOIs	https://doi.org/10.1016/j.eeh.2017.10.001
Publication status	Published - 2018 Apr 16

Subject classification (UKÄ)

Economic History

Free keywords

business cycles
gold standard
monetary policy
narrative identification
E31
E32
E52
E58
N13

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.eeh.2017.10.001

Cite this

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abstract = "This paper investigates the causal effects of monetary policy on the British economy during the classical gold standard. Based on the narrative identification approach, I find that following a one percentage point monetary tightening, unemployment rose by 0.9 percentage points, while inflation fell by 3.1 percentage points. In addition, monetary policy shocks accounted for a third of macroeconomic volatility.",

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AB - This paper investigates the causal effects of monetary policy on the British economy during the classical gold standard. Based on the narrative identification approach, I find that following a one percentage point monetary tightening, unemployment rose by 0.9 percentage points, while inflation fell by 3.1 percentage points. In addition, monetary policy shocks accounted for a third of macroeconomic volatility.

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KW - monetary policy

KW - narrative identification

KW - E31

KW - E32

KW - E52

KW - E58

KW - N13

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DO - 10.1016/j.eeh.2017.10.001

M3 - Article

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JO - Explorations in Economic History

JF - Explorations in Economic History

ER -

Did Monetary Policy Matter? Narrative Evidence from the Classical Gold Standard

Abstract

Subject classification (UKÄ)

Free keywords

UN SDGs

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Cite this