The Bank, the States, and the Market: An Austro-Hungarian Tale for Euroland, 1867-1914

Arbeitspapier

In 1867, the "Compromise" between Austria and Hungary laid the foundation of a single currency system with a common central bank. As in today's euroland, each part of the monarchy remained sovereign in fiscal matters. Moreover, the borrowing needs of both parts of the monarchy were quite large, since Austria and Hungary sought to promote their own economic development through government spending. Yet no 'fiscal stability pact' existed: the two countries could run deficits to the extent of the public's willingness to lend to them. They were thus only subjected to the discipline of the capital market. This paper documents the record of the Austro-Hungarian monetary union and shows how this discipline led to a process of increased power of the central bank.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 43

Classification and Topics

• Classification: Wirtschaft ; Investment; Capital; Intangible Capital; Capacity ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Capital Budgeting; Fixed Investment and Inventory Studies; Capacity ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
• Subject: Credit channel ; balance sheet channel ; investment ; panel data

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Flandreau, Marc
• Event: Veröffentlichung
• (who): Oesterreichische Nationalbank (OeNB)
• (where): Vienna
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/264635
• Last update: 10.03.2025, 11:44 AM CET