Working Paper: NBER ID: w23141
Authors: Sebastian Edwards
Abstract: On December 1933, John Maynard Keyes published an open letter to President Roosevelt, where he wrote: “The recent gyrations of the dollar have looked to me more like a gold standard on the booze than the ideal managed currency of my dreams.” In this paper I use high frequency data to investigate whether the gyrations of the dollar were unusually high throughout this period. My results show that although volatility was pronounced, it was not higher than during October 1931- July 1933. I analyze Keynes writings on the international monetary system in an effort to understand what he meant in his letter. I compare Keynes’s “The means to prosperity” with James P. Warburg’s plan for a “modified international standard.”
Keywords: No keywords provided
JEL Codes: B22; B26; B3; E31; E5; F31; N22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Gold buying program (F33) | Increase in exchange rate volatility (F31) |
| Gold buying program (F33) | High volatility regime (E32) |
| End of gold buying program (E58) | Decrease in exchange rate volatility (F31) |
| Recognition of pricing uncertainty (D81) | Decrease in exchange rate volatility (F31) |