[...]... (logarithms) 3 Monetary regimes and inflation 4 2600 , ~ 2100 o o 1600 II o lr) 0\ ~ 1100 600 1950 1960 1965 1970 1975 1980 1985 1990 1995 2000 Year ~ GB 0- (West) Germany -t:s :- France ~ Switzerland -0 - Italy -e- USA Sources: See Figure 2.1 Figure 2.2 Development ofcost ofliving indices in six countries, 195 0-2 000 before 1914, but only long-term swings The situation changes, however, after 1914 and. .. of the United States, Great Britain, France and Switzerland do not show an upward or downward trend 1790 = 2 4.8 -r -~ _, 4.3 C'3.8 ~ u :53.3 2.8 2.3 1750 1810 1830 1850 1870 1890 1910 1930 1950 1970 1990 1790/92 1913/14 1998 Year -0 - GB -0 - France l:r- Switzerland -0 - USA Sources: Mitchell (1976), pp 73 5-4 7 Statistisches Bundesamt (1981), pp 70 4-6 US Bureau of the Census (1976), Historical... Inflation, Gresham's Law and Exchange Rate', Journal of Institutional and Theoretical Economics, 145 (3), 46 5-8 8 Bemholz, Peter (1997), 'Paper Money Inflation, Gresham's Law and Exchange Rates in Ming China', Kredit und Kapital, 30(1), 3 5-5 1 Bemholz, Peter (2001), 'Monetary Constitution, Political-Economic Regime, and Long-Term Inflation' , Constitutional Political Economy, 12, 3-1 2 Every effort has been... money regimes, with the exception of the hyperinflation during the French Revolution, when the French monetary regime, too, was based on a paper money standard Monetary regimes binding the hands of rulers, politicians and governments are a necessary condition for keeping inflation at bay Metallic monetary regimes, especially the gold and silver standards, have shown the largest resistance to inflation, ... University 20 Monetary regimes and inflation Bemholz, Peter (1986), 'The Implementation and Maintenance of a Monetary Constitution', The Cato Journal, 6(2), Fall, 47 7-5 11 Reprinted in James A Dom and Anna J Schwartz (eds), The Search for Stable Money, Chicago and London: The University of Chicago Press (1987), pp 8 3-1 17 Bemholz, Peter (1999), 'The Bundesbank and the Process of European Monetary Integration',... 290 II / \.f \ 0 lr) lr) 240 ~ c:e ~ 'cf- ' ' 190 • " 140 90 + ,. ., -~ -r r - r ~ J 1513 1503 1533 1553 1523 1543 1563 1573 Year Price index Andalusia -Price index Old Castile and Leon Source: Hatnilton (1933) Figure 3.1 Development ofcommodity prices in Andalusia and Old Castile/Leon, 150 3-1 579 Inflation under metallic monetary regimes 23 approaches have been convincingly rejected... by France, the Netherlands and Switzerland only in 1936 Since then all countries were and are on a discretionary paper money standard, though Switzerland stuck to the gold standard, but only legally (and as a curiosity until 1999) It follows that the change from a non-inflationary to an inflationary longterm development depicted in Figure 2.1 can be explained by the change of the monetary regime from... standards (Figure 2.3) Note also that the French hyperinflation occurred during the rule of a discretionary paper money standard based on the assignats In Figure 2.3 the inflations in Russia and Austria (later Austria-Hungary) are reflected in the developments of the Austrian cost of living index and the Austrian and Russian exchange rates vis-a-vis the Hamburg Mark Banco (MB) and the French franc and. .. to explain inflation by non -monetary factors, for instance a cost-push and demand-pull inflation In the latter theories it is asserted that inflation is a consequence of excessive wage increases reached by unions or by excessive demand The hypothesis according to which inflations are a consequence of public budget Inflation and monetary regimes 11 deficits seems also not to fare well To draw such conclusions... 1 2 3 an inflationary development can be observed for the whole period; inflation has accelerated since about 1970; after 1970 two groups of countries show different inflationary developments The first group consisting of Italy, France and Great Britain shows a higher rate of inflation than the second consisting of Switzerland, (West) Germany and the United States Inflation and monetary regimes 5 . x0 y0 w1 h0" alt="" Monetary Regimes and Inflation