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How the Gold Standard functioned in Portugal: an analysis of some macroeconomic aspects

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  • António Portugal Duarte
  • João Sousa Andrade

Abstract

Portugal was the first country in Europe to join Great Britain in the Gold Standard, in 1854, having abandoned the principle of free gold convertibility in 1891. By elucidating the historical choice of the Gold Standard by the Portuguese authorities, and analysing its macroeconomic behaviour, we prove that it is a mistake to compare different monetary systems with the same indicators. Our examination of demand, supply and monetary shocks in the context of a Vector Autoregression (VAR) model confirm the idea of appropriate application of the principles of classical economics to the Gold Standard in Portugal. We also prove that the principles of demand management were not compatible with the functioning of the Gold Standard.

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  • António Portugal Duarte & João Sousa Andrade, 2012. "How the Gold Standard functioned in Portugal: an analysis of some macroeconomic aspects," Applied Economics, Taylor & Francis Journals, vol. 44(5), pages 617-629, February.
    • Handle: RePEc:taf:applec:44:y:2012:i:5:p:617-629
    DOI: 10.1080/00036846.2010.513675
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    Cited by:

    1. Nuno Ferraz Martins & António Portugal Duarte, 2014. "The Public Finance and the Economic Growth in the First Portuguese Republic," Economic Analysis, Institute of Economic Sciences, vol. 47(1-2), pages 59-75.
    2. João Sousa Andrade & Adelaide Duarte, 2011. "The Fundamentals of the Portuguese Crisis," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(2), pages 195-218, June.
    3. Rita Martins de Sousa, 2019. "Portugal adoption of the gold standard: political reasons for a monetary choice (1846-1854)," Working Papers GHES - Office of Economic and Social History 2019/64, ISEG - Lisbon School of Economics and Management, GHES - Social and Economic History Research Unit, Universidade de Lisboa.
    4. Pedro Bação & António Portugal Durate & Mariana Simões, 2013. "The International Monetary System in Flux: Overview and Prospects," GEMF Working Papers 2013-07, GEMF, Faculty of Economics, University of Coimbra.
    5. Harris Dellas & George S. Tavlas, 2013. "The Gold Standard, the Euro, and the Origins of the Greek Sovereign Debt Crisis," Cato Journal, Cato Journal, Cato Institute, vol. 33(3), pages 491-520, Fall.
    6. Harris Dellas & Goerge Tavlas, 2012. "The road to Ithaca: the Gold Standard, the Euro and the origins of the Greek sovereign debt crisis," Working Papers 149, Bank of Greece.
    7. Ana Filipa Dias & António Portugal Duarte, 2012. "Euro Integration Reserve Currency?," Book Chapters, in: João Sousa Andrade & Marta C. N. Simões & Ivan Stosic & Dejan Eric & Hasan Hanic (ed.), Managing Structural Changes - Trends and Requirements, edition 1, volume 1, chapter 8, pages 148-174, Institute of Economic Sciences.
    8. Manmohan Agarwal, 2017. "The Operation of the Gold Standard in the Core and the Periphery Before the First World War," Working Papers id:12074, eSocialSciences.
    9. Nuno Ferraz Martins & António Portugal Duarte, 2014. "The Public Finance and the Economic Growth in the First Portuguese Republic," Economic Analysis, Institute of Economic Sciences, vol. 47(1-2), pages 59-75.
    10. João Sousa Andrade & Adelaide Duarte, 2011. "Fundamentals of the Portuguese Crisis," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(2), pages 195-218.

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    More about this item

    JEL classification:

    • B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913

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