Past event
Department of Economics Research Seminar with Dr Stefano Ugolini, University of Toulouse Fiscal Dominance, Monetary Policy and Exchange Rates: Lessons from Early-Modern Venice
Stefano is an Associate Professor of Economics at the University of Toulouse (Sciences Po Toulouse and LEREPS). He was educated at Scuola Normale Superiore, Pisa (MA modern history, 2004), Sciences Po, Paris (PhD international finance, 2009), and the Graduate Institute of International and Development Studies, Geneva (Norges Bank post-doctoral fellowship, 2010). A specialist in monetary and financial history, he has contributed to the research projects of a number of central banks. Ugolini's research provides long-term views on topical economic issues, including — among others — central banking, monetary policy, foreign exchange regimes, financial crises, economic integration, market microstructure, and the microeconomics of banking. He has published extensively in a number of international journals, including the Journal of Economic Dynamics & Control, the Journal of Monetary Economics, the Economic History Review, the European Review of Economic History, Business History, and the Financial History Review. He is the author of The Evolution of Central Banking: Theory and History (Palgrave Macmillan, 2017).
Abstract: The impact of fiscal dominance on exchange rates has been relatively overlooked by the literature. We focus on an early unique experiment of freely floating State-issued money, implemented in Venice from 1619 to 1666. Building on a new hand-collected database from a previously unused archival source, we show that despite the Venetian government's reputation for fiscal prudence, the external value of the ducat was highly sensitive, and increasingly so, to episodes of automatic government deficit monetization through the Banco del Giro during the shocks of 1630 (outbreak of the bubonic plague) and 1648-50 (escalation of the Cretan War).