The Logic of Compromise: Monetary Bargaining in Austria-Hungary 1867-1913

  title={The Logic of Compromise: Monetary Bargaining in Austria-Hungary 1867-1913},
  author={Marc Flandreau},
  journal={International Finance},
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… 
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