Abstract
Abstract This chapter looks at the criticism of Norges Bank’s role during the First World War. In particular, historian and economist Wilhelm Keilhau severely criticized Norges Bank in his comprehensive review of economic policy during the war. Keilhau commented that, together with the captains of finance, the central bank contributed to ‘the destruction of the Norwegian monetary system, which the first generation after 1814 had made tremendous sacrifices to establish and which had been in pristine order for 62 years’. By suspending the banks’ obligation to redeem banknotes for gold, and then issuing massive amounts of notes, in addition to the financing of and integration into government activities, Norges Bank’s monetary policy has been largely held responsible for the sharp rise in inflation and krone depreciation—and by implication for the strongly criticized parity policy of the 1920s. As a non-belligerent country, one would have thought that the mandate for Norges Bank’s activities would have remained more or less intact. The chapter explains why that did not come to be.
Published Version
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