Preface

Summary

Few topics have been more popular among economic historians and political scientists than the monetary history of Western Europe, and the industry is still alive and well. Yet, as with any industry, some paths of discovery have been followed more frequently than others. Most important, scholars usually have focused on the large European countries because, obviously, France, Germany, and the United Kingdom have been the driving forces in Europe's monetary history, and therefore, the experiences of small European states have been neglected. This blind spot is the main reason for this study. It attempts to make a first step toward a more comprehensive understanding of the monetary history of seven small, economically developed countries: Austria, Belgium, Denmark, the Netherlands, Norway, Sweden, and Switzerland.

Given that almost every small state has its own language and has produced a bulk of literature on its monetary history, I decided to restrict the study in two ways. First, I focused on the question of exchange-rate regime changes, and second, I confined the period under study to the interwar years and the decades after the end of Bretton Woods because the regime changes were particularly frequent during these two periods. This restrictive approach enabled me to cope with the huge amounts of primary and public sources and to tell a coherent story. My main finding is that for most of the twentieth century, small European states preferred having their exchange rates fixed or pegged and that the reason for this preference was not institutional or economic in nature but rather the result of a deeply rooted fear that a floating exchange rate would hamper trade and complicate monetary policy.