Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/210014 
Year of Publication: 
2012
Series/Report no.: 
Working Paper No. 2012/15
Publisher: 
Norges Bank, Oslo
Abstract: 
This paper studies the microfoundations of the so-called "gold device" policy by analysing a new dataset on the Bank of England's operations in the gold market at the heyday of the classical gold standard. It explains that "gold devices" must be understood in connection to the Bank's role as gold market-maker in London and to the position of London as world gold market. Contrary to the literature, the paper shows that "gold devices" were sophisticated monetary policy tools intended to complement - not to substitute - interest rate policy and aimed at smoothing - not at hampering - international adjustment. These findings demonstrate the potential of adopting a microstructural approach to the study of monetary policy, and call for a reassessment of efficiency measurement for the gold standard.
Subjects: 
monetary policy
gold standard
gold market
market microstructure
JEL: 
E58
G24
L11
L14
N23
Persistent Identifier of the first edition: 
ISBN: 
978-82-7553-703-2
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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