Exchange rate and protection. The peseta outside the gold standard, 1883-1931


  • Mª Dolores Gadea Rivas
  • José Mª Serrano Sanz
  • Marcela Sabaté Sort



This paper analyzes the role played by the peseta outside the gold standard, between 1883-1931,in altering the levels of tariff protection enjoyed by the Spanish economy, a controversial theme in modern economic history. We test the compliance of purchasing power parity between the peseta and the pound sterling to determine the relationship between the exchange rate and relative prices. The test of the homogeneity or proportionality hypotheses is carried out on the basis of the parameters estimated by the ADL method and also through the cointegration technique proposed by Johansen. The results of both models prove the compliance of long-run purchasing power parity and confirm that the situation of the peseta outside the gold standard was neutral in terms of protection for the Spanish economy. The deviations produced in the short-run tended to be compensated for or corrected quite quickly.