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The limits to lender of last resort interventions in emerging economies: evidence from the Gold Standard and the Great Depression in Spain

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Conventional accounts argue that Spain escaped the Great Depression because its currency was not convertible to gold. Accordingly, when a bank run ensued in 1931, the Banco de España would have been able to lend freely as lender of last resort. Drawing on new archival data on bank balance sheets and discount window borrowing, I show that rapid currency depreciation caused by the reversal in international capital flows that started in 1928 bounded monetary authorities to a dilemma between liquidity assistance and capital mobility during the 1931 crisis. These limits to policy reaction help explain the sharp contraction in bank lending and economic activity during and after 1931.

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JORGE-SOTELO, Enrique. The limits to lender of last resort interventions in emerging economies: evidence from the Gold Standard and the Great Depression in Spain. _European Review of Economic History_. 2020. Vol. 24, núm. 1, pàgs. 98-133. [consulta: 26 de febrer de 2026]. ISSN: 1361-4916. [Disponible a: https://hdl.handle.net/2445/178070]

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