Going Dutch: The Management of Monetary Policy in the Netherlands during the Interwar Gold Standard

Research output: Working paper

Abstract

Under what conditions can policymakers make demonstrably poor policy choices? By providing a new account of monetary policy management in the Netherlands during the interwar gold standard, we show how policymakers can fail to escape their long-held beliefs and refuse to consider available policy alternatives. Using high-frequency macroeconomic data, we are the first to document that the Netherlands’ policymakers were able to conduct an independent monetary policy in the 1930s. We then show how this independence was squandered on fixing the guilder’s exchange rate, a policy which led only to deflation, trade deficits, corporate bankruptcies and mass unemployment. We explain the government’s policy stance by documenting the beliefs of politicians and central bankers, and then by investigating how business leaders and public intellectuals attempted to influence these beliefs.
Original languageEnglish
PublisherQueen's University Belfast
Publication statusPublished - Jul 2019

Publication series

NameQUCEH Working Paper Series
No.2019-03

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Gold standard
The Netherlands
Politicians
Monetary policy
Policy management
Trade deficit
Deflation
Unemployment
Government policy
Macroeconomics
Exchange rates
Bankers
Policy choice

Cite this

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Going Dutch: The Management of Monetary Policy in the Netherlands during the Interwar Gold Standard. / Colvin, Christopher L.; Fliers, Philip.

Queen's University Belfast, 2019. (QUCEH Working Paper Series; No. 2019-03).

Research output: Working paper

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Colvin CL, Fliers P. Going Dutch: The Management of Monetary Policy in the Netherlands during the Interwar Gold Standard. Queen's University Belfast. 2019 Jul. (QUCEH Working Paper Series; 2019-03).