Mitchener, Kris; Weidenmier, Marc - C.E.P.R. Discussion Papers - 2015
We use a standard metric from international finance, the currency risk premium, to assess the credibility of fixed … exchange rates during the classical gold standard era. Theory suggests that a completely credible and permanent commitment to … join the gold standard would have zero currency risk or no expectation of devaluation. We find that, even five years after …