The Worldwide Change in the Behavior of Interest Rates and Prices in 1914

30 Pages Posted: 26 Mar 2007 Last revised: 14 Dec 2007

See all articles by N. Gregory Mankiw

N. Gregory Mankiw

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Jeffrey A. Miron

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

David N. Weil

Brown University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: August 1987

Abstract

This paper evaluates the role of the destruction of the gold standard and the founding of the Federal Reserve, both of which occurred in 1914, in contributing to observed changes in the behavior of interest rates and prices after 1914. The paper presents a model of policy coordination in which the introduction of the Fed stabilizes interest rates, even if the gold standard remains intact, and it offers empirical evidence that the dismantling of the gold standard did not play a crucial role in precipitating the changes in interest rate behavior.

Suggested Citation

Mankiw, N. Gregory and Miron, Jeffrey A. and Weil, David Nathan, The Worldwide Change in the Behavior of Interest Rates and Prices in 1914 (August 1987). NBER Working Paper No. w2344. Available at SSRN: https://ssrn.com/abstract=976157

N. Gregory Mankiw

Harvard University - Department of Economics ( email )

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Jeffrey A. Miron

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

National Bureau of Economic Research (NBER)

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David Nathan Weil

Brown University - Department of Economics ( email )

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