Napoleon Series Archive 2015

How the Pound beat Napoleon *LINK*

Britainís Paper Army: How the Pound beat Napoleon
Simon Hinrichsen, London School of Economics

This paper argues that it was a necessity that Britain left the gold standard in 1797, but
that it ended up being a blessing in disguise. The Bank of England turned out to be a very
capable weapon against Napoleon through the issuance of cheap credit to finance the war,
whilst the British economy overall also performed better than the French. By extending
Chadha and Newbyís (2012) balance sheet approach, I show how the flexibility enabled
under a fiat system allowed the Bank of England to finance Britainís war effort more
effectively than Napoleonís Banque de France. Looking at interest rates, Britain was able
to borrow at lower rates than France throughout the war, even with higher levels of
borrowing. Britainís price level was also less volatile than Franceís. This, in the end,
played a significant role in the outcome of the war.

http://macroexposure.com/wp-content/uploads/2014/11/Britain%E2%80%99s-Paper-Army-How-the-Pound-beat-Napoleon-Hinrichsen-2014.pdf

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