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A pioneer of a new monetary policy? Sweden's price-level targeting of the 1930s revisited


Straumann, Tobias; Woitek, Ulrich (2009). A pioneer of a new monetary policy? Sweden's price-level targeting of the 1930s revisited. European Review of Economic History, 13(02):251-282.

Abstract

The paper re-examines Sweden’s price level targeting during the 1930s which is regarded as a precursor of today’s inflation targeting. According to conventional wisdom, the Riksbank was the first central bank to adopt price level targeting, although in practice giving priority to exchange rate stabilisation. Based on Bayesian econometric techniques and the evaluation of new archival sources, we come to the conclusion that defending a fixed exchange rate is hard to reconcile with the claim of adopting price level targeting. This finding has implications for the prevailing view of the 1930s as a decade of great policy innovations.

The paper re-examines Sweden’s price level targeting during the 1930s which is regarded as a precursor of today’s inflation targeting. According to conventional wisdom, the Riksbank was the first central bank to adopt price level targeting, although in practice giving priority to exchange rate stabilisation. Based on Bayesian econometric techniques and the evaluation of new archival sources, we come to the conclusion that defending a fixed exchange rate is hard to reconcile with the claim of adopting price level targeting. This finding has implications for the prevailing view of the 1930s as a decade of great policy innovations.

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5 citations in Web of Science®
9 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
06 Faculty of Arts > Institute of History
Dewey Decimal Classification:900 History
330 Economics
Language:English
Date:2009
Deposited On:07 Jan 2010 13:36
Last Modified:05 Apr 2016 13:34
Publisher:Cambridge University Press
ISSN:1361-4916
Additional Information:Copyright: Cambridge University Press
Publisher DOI:https://doi.org/10.1017/S1361491609002494
Permanent URL: https://doi.org/10.5167/uzh-24336

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