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The Dissolution of the Austro-Hungarian Empire: Lessons for Currency Reform

Author

Listed:
  • Mr. Michael G. Spencer
  • Mr. Peter M. Garber

Abstract

This paper investigates the currency reforms undertaken subsequent to the dissolution of the Austro-Hungarian Empire in 1918. The reforms were motivated by the lack of coordination of monetary policy and the absence of a rule for sharing seigniorage. Because the Successor States’ reforms were not carried out simultaneously, individuals could choose where to convert their crowns based on where their real value was greatest. The cross-border flows of notes was substantial, to the detriment of Hungary which was last to reform. The Austrian and Hungarian currencies were stabilized only with the help of League of Nations financial programs.

Suggested Citation

  • Mr. Michael G. Spencer & Mr. Peter M. Garber, 1992. "The Dissolution of the Austro-Hungarian Empire: Lessons for Currency Reform," IMF Working Papers 1992/066, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1992/066
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    Citations

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    Cited by:

    1. Flandreau, Marc, 2006. "The logic of compromise: Monetary bargaining in Austria-Hungary, 1867–1913," European Review of Economic History, Cambridge University Press, vol. 10(1), pages 3-33, April.
    2. 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.
    3. Barry Eichengreen, 2008. "Sui Generis EMU," NBER Working Papers 13740, National Bureau of Economic Research, Inc.
    4. Koichi Hamada, 1998. "The Choice of International Monetary Regimes in a Context of Repeated Games," Open Economies Review, Springer, vol. 9(1), pages 417-446, January.
    5. Michael D. Bordo & Lars Jonung, 1999. "The Future of EMU: What Does the History of Monetary Unions Tell Us?," NBER Working Papers 7365, National Bureau of Economic Research, Inc.
    6. Guillaume Cheikbossian, 2001. "When a Monetary Union Fails: A Parable," Open Economies Review, Springer, vol. 12(2), pages 181-195, April.
    7. Peter M. Garber, 1998. "Notes on the Role of TARGET in a Stage III Crisis," NBER Working Papers 6619, National Bureau of Economic Research, Inc.
    8. Cornelius, Peter K. & Trimbur, Thomas, 2000. "Heterogeneous policy responses and the risk of monetary disintegration in Europe," Research Notes 00-1, Deutsche Bank Research.

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