Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/77578
Authors: 
Hoffmann, Mathias
Woitek, Ulrich
Year of Publication: 
2011
Series/Report no.: 
Working Paper Series, Department of Economics, University of Zurich 57
Abstract: 
We study international business cycles and capital flows in the UK, the United States and the Emerging Periphery in the period 1885-1939. Based on the same set of parameters, our model explains current account dynamics under both the Classical Gold Standard and during the Interwar period. We interpret this as evidence for Gold Standard mentality: the expectation formation mechanism with respect to major macroeconomic variables driving the current account - output, exchange rates and interest rates - has remained fundamentally stable between the two periods. Nonetheless, the macroeconomic environment changed: Volatility increased generally, but less so for international capital flows than for GDP. This pattern is consistent with shocks in the Interwar period becoming more persistent and more global.
Subjects: 
Current Accounts
Capital Flows
Business Cycles
Great Depression
Gold Standard
Emerging Markets
Present-Value models
JEL: 
F32
F36
F40
F41
N1
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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