Do old habits die hard? Central banks and the Bretton Woods gold puzzle

Article dans une revue: We assess the importance of individual and institutional experience in shaping macroeconomic policy by studying the persistence of gold standard monetary practices in the Bretton Woods system. Using new data from the IMF archives, we show that, although they were not required to, countries continued to back currency in circulation with gold. The longer an institution spent in the gold standard (and the older the policymakers), the tighter the link between gold and currency. Such “old habits” prevented dollars and gold from working as perfect substitutes and ultimately contributed to the demise of the Bretton Woods system. Our findings highlight the persistence of past practices, even in the face of radical institutional change, and its consequences on the international monetary system.

Auteur(s)

Eric Monnet, Damien Puy

Revue
  • Journal of International Economics
Date de publication
  • 2020
Mots-clés JEL
D83 F33 M14 N10
Mots-clés
  • Central banking
  • Foreign reserves
  • Culture & beliefs
  • Bretton Woods
  • Gold
  • International monetary system
Version
  • 1
Volume
  • 127