Going Dutch: How the Netherlands Escaped its Golden Fetters, 1925-1936

The interwar gold standard is long thought to have prevented central bankers from running an independent monetary policy, forcing governments to leave this fixed exchange rate system in order to take control over domestic policy. But our study of the day-to-day management of monetary policy in the Netherlands reveals that officials were both willing and able to deviate from the monetary policy paths set by other countries, all while remaining firmly within the gold bloc. The Netherlands could afford to stay on gold thanks to its central bank's plentiful gold reserves. Additionally, we find tha... Mehr ...