Abstract

Using original data and archival sources, the paper investigates the degree of Italy financial dependence on international markets during the period of the classical gold standard (1880s-1913). Starting from Fenoaltea’s view of Italy as a country whose economic fluctuations were originated by exogenous variations in international financial flows, the paper shows how such dependence became progressively less stringent over the period. The paper argues that traditional explanations of this trend – based on improved macroeconomic conditions, reduction of the amount of bonds floated abroad and increase in the amount of international reserves – neglected the role played by a further variable: the development of foreign exchange reserves and their role in direct interventions in monetary and financial markets