Abstract
The successful stabilizations meant the establishment of international gold-exchange standards in the East European countries.1 The regime of the gold-exchange standard, and the accompanying banking arrangements, had important implications for the mode of adjustment of the respective economies to disturbances arising from international capital transations which were now becoming important in the balance of payments.
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Notes
Under the gold-exchange standard the circulating notes were not necessarily redeemable in gold, but the Central Bank was obliged to maintain the value of the national currency unit in relation to other gold currencies. An elaborate distinction of different types of gold-exchange standard can be found in William Adams Brown, Jr., The International Gold Standard Reinterpreted, National Bureau of Economic Research (New York, 1940), II, 734–36. Although both gold and foreign currencies could serve as reserves, there developed among the East European debtors a definite preference for gold hoards.
Witt, op. cit., pp. 224-25; Royal Institute..., The Baltic States., pp. 133-35; Sruoga, op. cit., pp. 94-101; Albert Feier, Polen in Zahlen (Königsberg: Institut f ür Osteurop äische Wirtschaft, 1938), p. 31.
There is a need for studies of the connection between capital flows and business cycles. We cannot explore this problem here, but its importance for the non-planned “young” economies is quite apparent. Theoretical interest in this problem was awakened after the revival of the international gold standard. See, for example, A. von Mühlenfels, “Internationale Konjunkturzusammenh änge,” Jahrb ücher für Nationalökonomie und Statistik, Band III, Folge 75, 1929, I.
Ragnar Nurkse, Internationale Kapitalbewegungen (Wien: J. Springer, 1935).
Gottfried von Haberler, Prosperity and Depression: A Theoretical Analysis of Cyclical Movements (Geneva: League of Nations, 1937). In the late 1930’s, under a compulsion to gain internal control of the economies (even at the cost of disrupting international economic relations) and with the abandonment of the gold standard, the interest in the study of international propagation of cycles (through trade and capital transfers) declined.
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© 1964 Springer Science+Business Media Dordrecht
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Bandera, V.N. (1964). Capital Movements and Levels of Economic Activity before the Great Depression (1925–30). In: Foreign Capital as an Instrument of National Economic Policy. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-6818-4_5
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