The logic of compromise : monetary bargaining in Austria-Hungary 1867-1913 - Sciences Po Access content directly
Preprints, Working Papers, ... Year : 2006

The logic of compromise : monetary bargaining in Austria-Hungary 1867-1913

Marc Flandreau
  • Function : Author
  • PersonId : 1114408

Abstract

This paper examines the historical record of the Austro-Hungarian monetary union, focusing on its bargaining dimension. As a result of the 1867 Compromise, Austria and Hungary shared a common currency, although they were fiscally sovereign and independent entities. By using repeated threats to quit, Hungary succeeded in obtaining more than proportional control and forcing the common central bank into a policy that was very favourable to it. Using insights from public economics, this paper explains the reasons for this outcome. Because Hungary would have been able to secure quite good conditions for itself had it broken apart, Austria had to provide its counterpart with incentives to stay on board. I conclude that the eventual split of Hungary after WWI was therefore not written on the wall in 1914, since the Austro-Hungarian monetary union was quite profitable to Hungarians.
Fichier principal
Vignette du fichier
cfi-wp-mf-cepr5397.pdf (1.48 Mo) Télécharger le fichier
Origin : Files produced by the author(s)
Loading...

Dates and versions

hal-01065619 , version 1 (18-09-2014)

Identifiers

  • HAL Id : hal-01065619 , version 1
  • SCIENCESPO : 2441/603

Cite

Marc Flandreau. The logic of compromise : monetary bargaining in Austria-Hungary 1867-1913. 2006. ⟨hal-01065619⟩

Collections

SCIENCESPO
128 View
834 Download

Share

Gmail Facebook X LinkedIn More