Who Adjusts?: Domestic Sources of Foreign Economic Policy During the Interwar Years
In this work Beth Simmons presents a fresh view of why governments decided to abide by or defect from the gold standard during the 1920s and 1930s. Previous studies of the spread of the Great Depression have emphasized "tit-for-tat" currency and tariff manipulation and a subsequent cycle of destructive competition. Simmons, on the other hand, analyzes the influence of domestic politics on national responses to the international economy. In so doing, she powerfully confirms that different political regimes choose different economic adjustment strategies. Using cross-sectional time series data and four cases, Simmons offers a profile of the domestic politics and institutions associated with capital flight, current account deficit, currency devaluation, and tariff protection - all of which were inconsistent with the demands of remaining on gold. She demonstrates that capital flight and current account deficits stemmed largely from governmental failure to develop credible anti-inflationary policies. In turn, decisions to externalize the subsequent deficits, whether through high tariffs or devaluation, were also driven by domestic political conditions. Who Adjusts? thus moves beyond systemic theories of international political economy, adding a new dimension to the study of the interwar situation.
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ACurrency Value adjustment associated Average Tariffs balance of payments Banque de France Belgian Belgium Britain British budget Bulgaria cabinet instability capital flight capital flows central bank independence changes commitment cooperation country's credibility currency depreciation currency value current account Current Account/NNP Czechoslovakia deficit countries deflation democracies democratic Denmark deterioration devaluation economic policy exchange rate expected exports external balance finance Finland fiscal foreign France's FRBNY French French franc Germany gold standard Hungary impact important increased independent central banks industrial inflation inflationary interest rates international economic interwar labor unrest League of Nations Left left-wing left-wing governments macroeconomic major trading partner ment million monetary policy Netherlands norms Norway party percent period Poincare policy mix position pressures production protectionism quotas regime Romania sample significant Socialists stability Statistics surplus countries tariff index tariff levels tion trade dependent unemployment United Kingdom University Press unstable governments World