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A Golden Combination: The Formation of Monetary Policy in Sweden after World War I

Published online by Cambridge University Press:  15 April 2015

MARTIN ERIKSSON
MARTIN ERIKSSON*
Affiliation:
Martin Eriksson is a researcher in Economic History at Umeå University in Umeå, Sweden.Contact information: Department of Geography and Economic History, Umeå University, S-901 87 Umeå, Sweden.Telephone: +46-(0)90-7866232. E-mail: Martin.Eriksson@ekhist.umu.se.
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Abstract

From a European perspective, what sets apart the Swedish return to the gold standard at prewar parity in 1924 is not only that it occurred before that of every other nation, including the United Kingdom, but also that it could be made by politicians without interference from the central bank. Against this background, it is argued that this decision may be related to the combined impact of two political positions that affected policy making in a crucial way. In a domestic policy context in which minority governments needed support from other parties to realize their political ambitions, the Social Democrats and Conservatives both developed separate positions in favor of an early return of the gold standard during the first part of the 1920s. Because these parties together formed a majority in both chambers of Parliament, a stable political support for a return of the gold standard could thereby emerge.

Type
Articles
Information
Enterprise & Society , Volume 16 , Issue 3 , September 2015 , pp. 556 - 579
Copyright
Copyright © The Author 2015. Published by Cambridge University Press on behalf of the Business History Conference. All rights reserved. 

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References

Bibliography of Works Cited

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Benner, Mats. The Politics of Growth. Economic Regulation in Sweden 1930–1994. Lund, Sweden: Arkiv förlag, 1997.Google Scholar
Eichengreen, Barry. Golden Fetters: The Gold Standard and the Great Depression, 1919–1939. Oxford: Oxford University Press, 1992.Google Scholar
Gerdner, Gunnar. Det svenska regeringsproblemet 1917–1920: från majoritetskoalition till minoritetsparlamentarism. Uppsala: Uppsala University, 1946.Google Scholar
Gerdner, Gunnar. Parlamentarismens kris Sverige vid 1920-talets början. Uppsala: Uppsala University, 1954.Google Scholar
Heckscher, Eli F. Sveriges penningväsende och penningpolitik. Från krigsutbrottet till den internationella guldmyntfotens återställelse 1914–1925. Stockholm: Norstedts förlag, 1926.Google Scholar
Katzenstein, Peter J. Small States in World Markets: Industrial Policy in Europe. Ithaca, NY: Cornell University Press, 1985.Google Scholar
Kindleberger, Charles P. The World in Depression 1929–1939. Harmandsworth, UK: Penguin, 1987.Google Scholar
Lundberg, Erik. Ekonomiska kriser förr och nu. Stockholm: SNS förlag, 1994.Google Scholar
Notermans, Ton. Money, Markets and the State. Social Democratic Policies since 1918. Cambridge: Cambridge University Press, 2000.CrossRefGoogle Scholar
Östlund, Anders. Svensk samhällsekonomi 1914–1922. Stockholm: Stockholms högskola, 1945.Google Scholar
Simmons, Beth A. Who Adjusts? Domestic Sources of Foreign Economic Policy during the Inter-war Years. Princeton, NJ: Princeton University Press, 1994.CrossRefGoogle Scholar
Stjernquist, Nils. Tvåkammartiden. Sveriges riksdag 1867–1970. Stockholm: Swedish Parliament, 1996.Google Scholar
Straumann, Tobias. Fixed Ideas of Money: Small States and Exchange Rate Regimes in Twentieth-Century Europe. Cambridge: Cambridge University Press, 2010.CrossRefGoogle Scholar
Temin, Peter. Lesson from the Great Depression. Cambridge, MA: MIT Press, 1989.Google Scholar
Torstendahl, Rolf. Mellan nykonservatism och liberalism. Idébrytningar inom högern och bondepartierna 1918-1934. Lund: Scandinavian University Press, 1969.Google Scholar
Bohlin, Jan. “From Appreciation to Depreciation: The Exchange Rate of the Swedish krona, 1913–2008.” In Exchange Rates, Prices, and Wages, 1277–2008, edited by Edvinsson, Rodney, Jacobson, Tor, and Waldenström, Daniel, 340–411. Stockholm: Central bank of Sweden, 2008.Google Scholar
Bordo, Michael D., and Kydland, Finn E.. “The Gold Standard as a Rule: An Essay in Exploration.” Explorations in Economic History, 32, no. 4 (1995): 423–464.Google Scholar
Eichengreen, Barry, and Simmons, Beth A.. “International Economics and Domestic Politics: Notes on the 1920s.” In Banking, Currency and Finance in Europe between the Wars, edited by Feinstein, Charles, 132–148. Oxford: Oxford University Press, 1995.Google Scholar
Eichengreen, Barry, and Temin, Peter. “The Gold Standard and the Great Depression,” Contemporary European History 9, no. 2 (2000): 183–207.CrossRefGoogle Scholar
Fregert, Klas. “Belling the Cat: Eli F. Heckscher on the Gold Standard as a Discipline Device.” Working Papers, Department of Economics, Lund University No 2011:19. Lund: Lund University, 2011.Google Scholar
Haavisto, Tarmo, and Jonung, Lars. “Off Gold and Back Again. Finnish and Swedish Monetary Policies 1914–1924.” In Banking, Currency and Finance in Europe between the Wars, edited by Feinstein, Charles, 238–265. Oxford: Oxford University Press, 1995.Google Scholar
Jonung, Lars. “Swedish Experience under the Classical Gold Standard 1873–1914.” In A Retrospective on the Classical Gold Standard, 1821–1931, edited by Bordo, Michael D. and Schwartz, Anna, 361–404. Chicago: University of Chicago Press, 1984.Google Scholar
Lanzalaco, Luca. “Business Interest Associations.” In The Oxford Handbook of Business History, edited by Jones, Geoffrey and Zeitlin, Jonathan, 219–315. Oxford: Oxford University Press, 2007.Google Scholar
Lundberg, Erik. “The Rise and Fall of the Swedish Model,” Journal of Economic Literature 23, no. 1 (1985): 1–36.Google Scholar
Nationalekonomiska föreningens förhandlingar den 15 april 1921. Stockholm: Nationalekonomiska föreningen, 1921.CrossRefGoogle Scholar
Ögren, Anders, and Øksendal, Lars Fredrik. “The Case for the Peripheries.” In The Gold Standard Peripheries: Monetary, Adjustment and Flexibility in a Global Setting, edited by Ögren, Anders and Øksendal, Lars Fredrik, 1–14. Basingstoke, UK: MacMillan Palgrave, 2012.CrossRefGoogle Scholar
Péteri, Györgi. ”The Inflation-Proof Gold Standard. The Foreign Policy of Riksbankschefen Victor Moll and the Origins of the Swedish Ban on Gold Imports in 1924.” Journal of European Economic History 13, no. 3 (1984): 635–663.Google Scholar
Center for Business History, Stockholm. Swedish Federation of Industries archive.Google Scholar
Labor Movement Archives and Library, Stockholm. Social Democratic Party archive.Google Scholar
Swedish Central Bank, Historisk monetär statistik, månatliga valutakurser i Sverige 1913–2006, http://www.riksbank.se/sv/Riksbanken/Forskning/Historisk-monetar-statistik/Valutakurser/Manatliga-valutakurser-i-Sverige-19132006/.Google Scholar
Swedish National Archive, Stockholm. YK 95, Documents from the Finance Experts of 1920.Google Scholar
Swedish National Archive, Stockholm. YK 141, Documents from the Economic Council.Google Scholar
Swedish National Archive, Stockholm. YK 897, Documents from the Tariffs and Treaties Committee.Google Scholar
Bankoutskottets utlåtande Nr 27/1921.Google Scholar
Bankoutskottets utlåtande Nr 27/1924.Google Scholar
Kunglig Maj:ts Proposition 1/1921.Google Scholar
Kunglig Maj:ts proposition 157/1922.Google Scholar
Kunglig Maj:ts proposition 253/1922.Google Scholar
Kunglig Maj:ts proposition 94/1923.Google Scholar
Kunglig Maj:ts proposition 77/1924.Google Scholar
Riksdagens Första Kammares Protokoll Nr 27/1921Google Scholar
Riksdagens Andra Kammares Protokoll Nr 33/1921.Google Scholar
Riksdagens Första Kammares Protokoll Nr 24/1924.Google Scholar
Riksdagens Andra Kammares Protokoll Nr 23/1924.Google Scholar
Tull-och traktatkommittén. “Utlåtande i valutafrågan. Tull-och traktatkommitténs utredningar och betänkanden VIII,” Stockholm: Isaac Marcus Boktryckeri-aktiebolag, 1922.Google Scholar
1920 års finanssakkunniga, “Utlåtande angående frågan huruvida och i vad mån ett program för den närmaste framtiden för svensk finanspolitik må kunna åstadkommas.”Google Scholar