Book contents
- Frontmatter
- Contents
- List of illustrations
- Acknowledgements
- List of abbreviations
- 1 A beginner's guide to central banking
- 2 Very boring guys?
- 3 Wind in the willows: the small world of central banking c. 1900
- 4 Something for everyone: new central banks, 1900–1939
- 5 A series of disasters: central banking, 1914–1939
- 6 The mysteries of central bank cooperation
- 7 The first central banking revolution
- 8 No time for cosmic thinkers: Central banking in the ‘Keynesian’ era
- 9 Rekindling central bank cooperation in the Bretton Woods era
- 10 The goose that lays the golden egg: Central banking in developing countries
- 11 The horse of inflation
- 12 The second central banking revolution: Independence and accountability
- 13 Reputations at stake: financial deregulation and instability
- 14 Inflation targeting: the holy grail?
- 15 The long march to European monetary integration
- 16 A world with half a million central bankers
- References
- Index
5 - A series of disasters: central banking, 1914–1939
Published online by Cambridge University Press: 04 February 2011
- Frontmatter
- Contents
- List of illustrations
- Acknowledgements
- List of abbreviations
- 1 A beginner's guide to central banking
- 2 Very boring guys?
- 3 Wind in the willows: the small world of central banking c. 1900
- 4 Something for everyone: new central banks, 1900–1939
- 5 A series of disasters: central banking, 1914–1939
- 6 The mysteries of central bank cooperation
- 7 The first central banking revolution
- 8 No time for cosmic thinkers: Central banking in the ‘Keynesian’ era
- 9 Rekindling central bank cooperation in the Bretton Woods era
- 10 The goose that lays the golden egg: Central banking in developing countries
- 11 The horse of inflation
- 12 The second central banking revolution: Independence and accountability
- 13 Reputations at stake: financial deregulation and instability
- 14 Inflation targeting: the holy grail?
- 15 The long march to European monetary integration
- 16 A world with half a million central bankers
- References
- Index
Summary
Men are far readier to plead – to themselves as to others – lack of power than lack of judgment as an explanation for failure.
Milton Friedman and Anna J. Schwartz (1963: 418)[I]t is a special characteristic of the art of central banking that it deals specifically with the task of an authority entrusted with the promotion of economic welfare.
Ralph Hawtrey (1932: vi)Central bankers failed abjectly to promote the public welfare at key moments in the interwar decades, especially during the depression of the early 1930s. They were made to pay for their shortcomings when the central banking world was thrust into its first age of revolution as one country after another rejected gold.
Maddison (1995: 65) portrays the entire period from 1913 to 1950 as ‘a bleak age, whose potential for accelerated growth was frustrated by a series of disasters’, including two world wars and the worst depression in history. This chapter focuses on the activities of central banks in a troubled world. How was central banking affected by war and depression? Were central banks equipped to cope with the unexpected? To what extent were they to blame for the depression of the early 1930s? How much of their autonomy could they preserve after the depression? Generally speaking, the First World War and the interwar decades were disastrous for central banks. War brought inflation, the suspension of the gold standard, and the subjugation of central bankers to governments.
- Type
- Chapter
- Information
- Central Banking in the Twentieth Century , pp. 69 - 90Publisher: Cambridge University PressPrint publication year: 2010