Latin American Experiments in Central Banking at the Onset of the Great Depression

doi:10.1017/9781009367578.015

12 - Latin American Experiments in Central Banking at the Onset of the Great Depression

from Part II - Specific

Published online by Cambridge University Press: 02 November 2023

Juan Flores Zendejas and

Gianandrea Nodari

Edited by

Barry Eichengreen and

Andreas Kakridis

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Barry Eichengreen: Affiliation:
University of California, Berkeley
Andreas Kakridis: Affiliation:
Bank of Greece and Panteion University, Athens

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Summary

To date, research on Latin American central banks in the interwar years has focused on their loss of autonomy due to the slump and subsequent implementation of innovative, countercyclical monetary policies. These policies, although fostering economic recovery, led to higher rates of inflation and exchange-rate volatility. The chapter shows that these policies resulted from more than loss of autonomy and subordination of central banks to governments. In fact, the need for countercyclical monetary policies had been foreseen by foreign advisors to newly established central bank before and during the crisis, but Latin American central bankers had been reluctant to implement them for fear of damaging the credibility of the gold-standard regime. This finally changed with the collapse of the gold exchange standard. In the 1930s, central banks had become effective actors, channeling credit to the real economy and supporting the emergence of state institutions that would promote the development of local industry.

Keywords

Latin America central banking Great Depression gold standard money doctors financial crises

Type: Chapter
Information: The Spread of the Modern Central Bank and Global Cooperation
1919–1939
, pp. 320 - 351

DOI: https://doi.org/10.1017/9781009367578.015 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2023

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