Regimes of Fiscal and Monetary Policy in England During the French
Regimes of Fiscal and Monetary Policy in England during the French Wars (1793-1821)1 Pamfili Antipa∗2 and Christophe Chamley∗∗3 * Sciences Po and Banque de France ** Boston University and Paris School of Economics December 30, 2019 Abstract The French Wars (1793-1815) forced unprecedented coordination between fiscal and monetary authorities and a revolution in the role of the Bank of England. Using hand-collected data, this analysis of the fiscal and monetary policies at that time, and of their impacts on the price of the pound in the internal and the external markets, highlights how the steady overarching commitment to fiscal balance led to the extraordinary success of a flexible implementation of this principle in four sharply defined regimes between 1793 and 1821, \tax-smoothing as usual" (1793-1797), \Real Bills and war tax" (1797-1810), \whatever it takes" (1810-1810), \exit" (1815-1821). Keywords: Interactions between monetary and fiscal policies, central bank balance sheet, policy commitment, Fiscal Theory of the Price Level. JEL: N13, H63, E58, E62. 1The views expressed herein are those of the authors and do not necessarily reflect those of the Banque de France. All remaining errors are ours. We are particularly thankful for comments by Vincent Bignon, Forrest Capie, Rui Esteves, Pierre-Cyrille Hautcoeur, Sumner La Croix, Larry Neal, Galo Nuno, Patrick O'Brien, Xavier Ragot, Albrecht Ritschl, Stefano Ugolini, Fran¸coisVelde, and Xiaodong Zhu. We also thank seminar and conference participants at Banco d'Espana, Banque de France, Economic History Society, European His- torical Economics Society, London School of Economics and Political Science, Oesterreichische Nationalbank, University of Cambridge, University of Oxford, Western Economic Association International, the University of Warwick, Tsinghua University.
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