
Contents
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3.1 Introduction 3.1 Introduction
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3.2. Economic Policy Coordination in the 1930s:A Simple Framework 3.2. Economic Policy Coordination in the 1930s:A Simple Framework
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3.3. The Shadow of World War One 3.3. The Shadow of World War One
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3.4. Coordination Failure: Europe’s Reaction to the Great Depression 1930–36 3.4. Coordination Failure: Europe’s Reaction to the Great Depression 1930–36
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3.4.1. The decision (not) to abandon the gold standard 3.4.1. The decision (not) to abandon the gold standard
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3.4.2 The decision (not) to pursue expansionary policies 3.4.2 The decision (not) to pursue expansionary policies
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3.5. Conclusion and Some Implications for European Economic Policy 3.5. Conclusion and Some Implications for European Economic Policy
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Bibliography Bibliography
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3 3 Europe’s Great Depression: Coordination Failure after the First World War
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Published:February 2013
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Abstract
This chapter is a survey and a reinterpretation of the extensive literature on Europe’s Great Depression. The chapter argues that Europe could not exploit its vast economic potential after 1918 because the First World War had not yet come to an end. Indeed, it did not end before 1945. Both domestic and international institutions suffered from a lack of reciprocal trust and commitment which can be clearly illustrated in the realm of monetary policy, but also affected many other areas of policy making, for example energy or migration policies. These institutions in turn affected expectations and thereby the extent to which, for example, expansionary policies could be effective.
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