Die Oesterreichische Nationalbank im Spannungsfeld von Wachstum, Inflation und Rezession

Abstract

The Austrian National Bank under the Constraint of Growth, Inflation and Recession

The review of monetary developments in Austria is introduced by a description of the statutory basis, tasks and available instruments of the Austrian National Bank. It is established that the central bank is in the fortunate position of having clearly defined tasks and an array of modern instruments for effective intervention. To understand the poblems and policy of the past decade, it is necessary to have an insight into the development of the country, the economy and the currency since the end of World War II. In presenting that insight, the periods of reconstruction, of overcoming inflation and of rehabilitation are outlined, The following passages deal with the policy of the Austrian National Bank under the constraint of reinvigourated economic growth, a concomitant, highly dynamic wage and price trend, and the impact of international monetary crises on the stability of the internal and external value of the Austrian schilling. In this period, in which the minor recession of 1967 also cast its shadow for the first time, the Austrian National Bank attempted to combat each situation by flexible and co-ordinated application of the instruments of credit and foreign exchange policy. The data on Austrian economic development and the high repute of the schilling at home and abroad reflect the success of those efforts. The persistence of international monetary disquiet, a renewed, very burdensome upward trend of wages and prices, and the ever more difficult management of the public household coupled with large budget deficits showed ever more clearly that the central bank alone was no longer capable of mastering the situation and that only a comprehensive package of measures undertaken by all responsible for the economy and the currency could provide a remedy. In 1972, therefore, with the co-operation of the federal government, management and labour, and the banking institutions, the first comprehensive stability agreement was concluded on a broad basis: a wide range of monetary policy measures by the central bank, agreements between management and labour on moderation in price and wage movements, and a series of fiscal and budget policy decisions were the main items in this agreement. This co-operation among all responsible agencies, which is typical of the Austrian mentality, and the concurrent conclusion of voluntary agreements to overcome specific situations and difficulties marked the course followed in the past decade of Austrian economic and monetary policy and enabled negative influences from abroad in the train of monetary crises to be largely warded off and an independent economic trend to be secured.