IDEAS home Printed from https://ideas.repec.org/p/cdf/wpaper/2005-4.html
   My bibliography  Save this paper

Lessons from Italian Monetary Unification

Author

Listed:

Abstract

This paper examines whether the states brought together in the Italian monetary union of the nineteenth century constituted an optimum monetary area, either before or after unification. Interest rate shocks indicate close relations between states in northern Italy but negative correlations between the North and the South before unification, suggesting some advantages of continued Southern monetary independence. The proportion of Southern Italian trade with the North was small, in contrast to intra- Northern trade, and therefore monetary independence imposed a light burden. Changes in the wheat market indicate that the South and North after unification (though not probably because of it) increasingly specialised according to their comparative advantages. Coupled with differences in economic behaviour of the Southern economy, this meant that monetary policies appropriate for the North were less so for the South. In the face of agricultural shocks originating in the New World and in France, the South would have gained from depreciating its exchange rate against the North or against the non-Italian world. As it was, nineteenth century Italian monetary union did not create the conditions for its own success, contrary to the findings of Frankel and Rose (1998) for the later twentieth century.

Suggested Citation

  • Foreman-Peck, James, 2005. "Lessons from Italian Monetary Unification," Cardiff Economics Working Papers E2005/4, Cardiff University, Cardiff Business School, Economics Section.
  • Handle: RePEc:cdf:wpaper:2005/4
    as

    Download full text from publisher

    File URL: http://carbsecon.com/wp/E2005_4.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Masson,Paul R. & Taylor,Mark P. (ed.), 1993. "Policy Issues in the Operation of Currency Unions," Cambridge Books, Cambridge University Press, number 9780521434553, September.
    2. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chiaruttini, Maria Stella, 2020. "Banking integration and (under)development: A quantitative reassessment of the Italian financial divide (1814-74)," IBF Paper Series 03-20, IBF – Institut für Bank- und Finanzgeschichte / Institute for Banking and Financial History, Frankfurt am Main.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Patrick Legros & Andrew F. Newman & Eugenio Proto, 2014. "Smithian Growth through Creative Organization," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 796-811, December.
    2. Vania Licio, 2023. "The Italian coal shortage: the price of import and distribution, 1861–1911," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 17(3), pages 501-532, September.
    3. Oscar Bajo-Rubio & Carmen Díaz-Roldán, 2003. "Insurance Mechanisms against Asymmetric Shocks in a Monetary Union a Proposal with an Application to EMU," Recherches économiques de Louvain, De Boeck Université, vol. 69(1), pages 73-96.
    4. Fidrmuc, Jan, 2001. "Migration and adjustment to shocks in transition economies," ZEI Working Papers B 23-2001, University of Bonn, ZEI - Center for European Integration Studies.
    5. James Foreman-Peck & Peng Zhou, 2021. "Fertility versus productivity: a model of growth with evolutionary equilibria," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(3), pages 1073-1104, July.
    6. Picard, Pierre M. & Toulemonde, Eric, 2006. "Firms agglomeration and unions," European Economic Review, Elsevier, vol. 50(3), pages 669-694, April.
    7. Fidrmuc, Jan & Horvath, Julius & Fidrmuc, Jarko, 1999. "The Stability of Monetary Unions: Lessons from the Breakup of Czechoslovakia," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 753-781, December.
    8. Ageliki Anagnostou & Ioannis Panteladis & Maria Tsiapa, 2015. "Disentangling different patterns of business cycle synchronicity in the EU regions," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(3), pages 615-641, August.
    9. Giovanni Dosi & Andrea Roventini & Emmanuele Russo, 2020. "Public Policies And The Art Of Catching Up," Working Papers hal-03242369, HAL.
    10. Cohen, Joseph N & Linton, April, 2010. "The historical relationship between inflation and political rebellion, and what it might teach us about neoliberalism," MPRA Paper 22522, University Library of Munich, Germany.
    11. Cha, Myung Soo, "undated". "Living Standards, Inequality, and Human Development since 1870 : a Review of Evidence," IFCS - Working Papers in Economic History.WH 28438, Universidad Carlos III de Madrid. Instituto Figuerola.
    12. Qing Pei & David D Zhang & Harry F Lee & Guodong Li, 2014. "Climate Change and Macro-Economic Cycles in Pre-Industrial Europe," PLOS ONE, Public Library of Science, vol. 9(2), pages 1-8, February.
    13. Stegl, Mojgan & Baten, Joerg, 2009. "Tall and shrinking Muslims, short and growing Europeans: The long-run welfare development of the Middle East, 1850-1980," Explorations in Economic History, Elsevier, vol. 46(1), pages 132-148, January.
    14. Robert C. Allen, 2005. "Capital Accumulation, Technological Change, and the Distribution of Income during the British Industrial Revolution," Economics Series Working Papers 239, University of Oxford, Department of Economics.
    15. Bassino, Jean-Pascal & Broadberry, Stephen & Fukao, Kyoji & Gupta, Bishnupriya & Takashima, Masanori, 2019. "Japan and the great divergence, 730–1874," Explorations in Economic History, Elsevier, vol. 72(C), pages 1-22.
    16. Vincent Geloso & Peter Lindert, 2020. "Relative costs of living, for richer and poorer, 1688–1914," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 14(3), pages 417-442, September.
    17. Edwyna Harris & Sumner La Croix, 2019. "Prices, Wages, and Welfare in Early Colonial South Australia, 1836-1850," Monash Economics Working Papers 07-19, Monash University, Department of Economics.
    18. Florence Huart & Médédé Tchakpalla, 2019. "Labor Market Conditions and Geographic Mobility in the Eurozone," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(2), pages 263-284, June.
    19. Hersh, Jonathan & Voth, Hans-Joachim, 2022. "Sweet diversity: Colonial goods and the welfare gains from global trade after 1492," Explorations in Economic History, Elsevier, vol. 86(C).
    20. G Ottaviano & Diego Puga, 1997. "Agglomeration in a global Economy: A Survey," CEP Discussion Papers dp0356, Centre for Economic Performance, LSE.

    More about this item

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • F15 - International Economics - - Trade - - - Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdf:wpaper:2005/4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Yongdeng Xu (email available below). General contact details of provider: https://edirc.repec.org/data/ecscfuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.