TY  - JOUR
AU  - Kaminsky,Graciela L.
AU  - Klein,Michael
TI  - The Real Exchange Rate and Fiscal Policy During the Gold Standard PeriodEvidence from the United States and Great Britain
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4809
PY  - 1994
Y2  - July 1994
UR  - http://www.nber.org/papers/w4809
L1  - http://www.nber.org/papers/w4809.pdf
N1  - Author contact info:
Graciela L. Kaminsky
Department of Economics
George Washington University
Washington, DC  20052
Tel: 202/994-6686
Fax: 202/994-6147
E-Mail: graciela@gwu.edu

Michael W. Klein
Fletcher School
Tufts University
Medford, MA 02155
Tel: (617) 627-2718
Fax: (617) 627-3712
E-Mail: michael.klein@tufts.edu
AB  - We study the determinants of the dollar/pound real exchange rate from 1879 to 1914 focusing on the role of fiscal policy.  We present a simple dynamic model of the real exchange rate to frame our analysis. The econometric results are based upon the decomposition of the sources of the innovation of the real exchange rate drawn from a structural vector autoregression model.  We find little evidence that changes in tariffs and government spending affected the real exchange rate.  There is some stronger empirical evidence that shocks to deficits were associated with the fluctuations in the real exchange rate.
ER  -