[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/nbb/reswpp/201803-339.html
   My bibliography  Save this paper

Paul van Zeeland and the first decade of the US Federal Reserve System : The analysis from a European central banker who was a student of Kemmerer

Author

Listed:
  • Ivo Maes

    (National Bank of Belgium and Robert Triffin Chair, Université catholique de Louvain and ICHEC Brussels Management School, Boulevard de Berlaimont 14, 1000 Brussels, Belgium)

  • Rebeca Gomez Betancourt

    (University of Lyon 2. Triangle-ISH)

Abstract
The establishment of a central bank occurred at very different moments in the process of economic integration in the United States and the European Union. In this paper, we go into the first years of the Federal Reserve System through the lens of Paul van Zeeland’s PhD dissertation. Paul van Zeeland (1893-1973) became the first Head of the Economics Service of the National Bank of Belgium in 1921, after his studies in Princeton with Edwin Walter Kemmerer. There are clear similarities in their analyses of the Federal Reserve System, for instance in their adherence to the gold standard and the real bills doctrine as well as in their emphasis on the elasticity of the money supply. Moreover, they shared a view - with hindsight a rather naïve view - that with the Fed in place, financial crises would be a distant memory. However, there were also important differences. So, van Zeeland, like several other economists as Warburg, accorded greater significance to the discount market (a key factor for the international role of the dollar) and to a stronger centralization of the Fed (which would be taken up in the 1935 Banking Act). Moreover, very specific for van Zeeland is the importance given to the Fed's independence from the State (an element related to his continental European background and Belgium's experience of monetary financing during the war).

Suggested Citation

  • Ivo Maes & Rebeca Gomez Betancourt, 2018. "Paul van Zeeland and the first decade of the US Federal Reserve System : The analysis from a European central banker who was a student of Kemmerer," Working Paper Research 339, National Bank of Belgium.
    • Handle: RePEc:nbb:reswpp:201803-339
    as

    Download full text from publisher

    File URL: https://www.nbb.be/doc/ts/publications/wp/wp339en.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Eichengreen, Barry & Mehl, Arnaud & Chitu, Livia & Richardson, Gary, 2015. "Mutual Assistance between Federal Reserve Banks: 1913–1960 as Prolegomena to the TARGET2 Debate," The Journal of Economic History, Cambridge University Press, vol. 75(3), pages 621-659, September.
    2. Eichengreen, Barry, 2012. "Exorbitant Privilege: The Rise and Fall of the Dollar," OUP Catalogue, Oxford University Press, number 9780199642472.
    3. Rebeca Gomez Betancourt, 2010. "E. W. Kemmerer's contribution to the quantity theory of money," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 17(1), pages 115-140.
    4. Rebeca Gomez Betancourt, 2010. "Edwin Walter Kemmerer and the origins of the Federal Reserve System," Post-Print halshs-00559631, HAL.
    5. Gomez Betancourt, Rebeca, 2010. "Edwin Walter Kemmerer And The Origins Of The Fed," Journal of the History of Economic Thought, Cambridge University Press, vol. 32(4), pages 445-470, December.
    6. Bordo,Michael D. & Roberds,William (ed.), 2013. "The Origins, History, and Future of the Federal Reserve," Cambridge Books, Cambridge University Press, number 9781107013728, September.
    7. Ivo Maes, 2002. "Economic Thought and the Making of European Monetary Union," Books, Edward Elgar Publishing, number 2515.
    8. António Almodovar & Pedro Teixeira, 2008. "The Ascent and Decline of Catholic Economic Thought, 1830–1950s," History of Political Economy, Duke University Press, vol. 40(5), pages 62-87, Supplemen.
    9. Ivo Maes, 2010. "A century of macroeconomic and monetary thought at the National Bank of Belgium," Working Paper Research 188, National Bank of Belgium.
    10. Robert W. DIMAND, 2003. "Competing Visions For The U.S. Monetary System, 1907-1913: The Quest For An Elastic Currency And The Rejection Of Fisher'S Compensated Dollar Rule For Price Stability," Cahiers d’économie politique / Papers in Political Economy, L'Harmattan, issue 45, pages 101-121.
    11. Ivo Maes & Erik Buyst, 2005. "Migration and Americanization: The special case of Belgian economics," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 12(1), pages 73-88.
    12. P. Butzen & S. Cheliout & H. Geeroms, 2014. "Lessons from the US for the institutional design of EMU," Economic Review, National Bank of Belgium, issue ii, pages 82-101, September.
    13. Perry Mehrling, 2002. "Retrospectives: Economists and the Fed: Beginnings," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 207-218, Fall.
    14. Barry Eichengreen & Arnaud Mehl & Livia Chitu, 2017. "How Global Currencies Work: Past, Present, and Future," Economics Books, Princeton University Press, edition 1, number 11124.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ivo Maes, 2012. "On the origins of the Triffin dilemma: Empirical business cycle analysis and imperfect competition theory," Working Paper Research 240, National Bank of Belgium.
    2. repec:dau:papers:123456789/10190 is not listed on IDEAS
    3. repec:dau:papers:123456789/10195 is not listed on IDEAS
    4. Rebeca Gomez Betancourt & Jérôme de Boyer des Roches, 2013. "Origins and developments of Irving Fisher's compensated dollar plan," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 20(2), pages 261-283, April.
    5. Ivo Maes, 2013. "On the origins of the Triffin dilemma," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 20(6), pages 1122-1150, December.
    6. Eichengreen, Barry & Flandreau, Marc & Mehl, Arnaud & Chitu, Livia, 2017. "International Currencies Past, Present, and Future: Two Views from Economic History," OUP Catalogue, Oxford University Press, number 9780190659455.
    7. Ethan Ilzetzki & Carmen M Reinhart & Kenneth S Rogoff, 2020. "Why is the euro punching below its weight?," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 35(103), pages 405-460.
    8. repec:dau:papers:123456789/6554 is not listed on IDEAS
    9. Bahaj, Saleem, 2020. "Jumpstarting an International Currency," CEPR Discussion Papers 14793, C.E.P.R. Discussion Papers.
    10. Pierre-Olivier Gourinchas & Hélène Rey & Maxime Sauzet, 2019. "The International Monetary and Financial System," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 859-893, August.
    11. Christopher Clayton & Amanda Dos Santos & Matteo Maggiori & Jesse Schreger, 2022. "Internationalizing Like China," NBER Working Papers 30336, National Bureau of Economic Research, Inc.
    12. Alan de Bromhead & David Jordan & Francis Kennedy & Jack Seddon, 2023. "Sterling's farewell symphony: The end of the Sterling Area revisited," Economic History Review, Economic History Society, vol. 76(2), pages 415-444, May.
    13. Ivo Maes, 2010. "A century of macroeconomic and monetary thought at the National Bank of Belgium," Working Paper Research 188, National Bank of Belgium.
    14. Rockoff, Hugh, 2015. "O.M.W. Sprague (the man who “wrote the book” on financial crises) and the founding of the Federal Reserve," Journal of Financial Stability, Elsevier, vol. 17(C), pages 35-45.
    15. Jaremski, Matthew, 2018. "The (dis)advantages of clearinghouses before the Fed," Journal of Financial Economics, Elsevier, vol. 127(3), pages 435-458.
    16. Reiss, Daniel Gersten, 2014. "Invoice Currency in Brazil," MPRA Paper 59412, University Library of Munich, Germany.
    17. Barry Eichengreen & Arnaud Mehl & Livia Chiţu & Thorsten Beck, 2019. "Mars or Mercury? The geopolitics of international currency choice," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 34(98), pages 315-363.
    18. Bordo, Michael D. & Rockoff, Hugh, 2013. "The Influence Of Irving Fisher On Milton Friedman’S Monetary Economics," Journal of the History of Economic Thought, Cambridge University Press, vol. 35(2), pages 153-177, June.
    19. Pilar Piqué, 2016. "La jerarquía de monedas nacionales y los problemas financieros actuales," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 18(34), pages 69-85, January-J.
    20. Masahiro Kawai, 2014. "Asian Monetary Integration : A Japanese Perspective," Governance Working Papers 24158, East Asian Bureau of Economic Research.
    21. Sergey Sinelnikov-Murylev & Alexandr Radygin (ed.), 2018. "Russian Economy in 2017. Trends and Outlooks. (Issue 39) In English," Books, Gaidar Institute for Economic Policy, edition 1, volume 39, number re39-2017-en.
    22. Marcel Fratzscher & Arnaud Mehl, 2014. "China's Dominance Hypothesis and the Emergence of a Tri‐polar Global Currency System," Economic Journal, Royal Economic Society, vol. 124(581), pages 1343-1370, December.
    23. Stefano Solari, 2010. "The corporative third way in Social Catholicism (1830 to 1918)," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 17(1), pages 87-113.

    More about this item

    Keywords

    van Zeeland; Kemmerer; Federal Reserve System; financial crisis; banking reform;
    All these keywords.

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbb:reswpp:201803-339. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/bnbgvbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.