A Study On Discount Policy Of The Bank Of England During The Liberal Period

1847-1914 was the period of economic liberalism in Britain.During this period,the British productivity achieved a great breakthrough,and economic freedom became a highly advocated aspect of British politics.However,from the perspective of the actual development situation,the economic freedom of Britain is not completely laissez-faire market.The Bank of England has started to carry out part of the regulation functions of the modern central bank,and the discount rate of the Bank of England is their regulation tool.Like modern central banks,the Bank of England's discount rate can dampen excess demand when the economy is overheating,preventing panic from spreading in a crisis;To stimulate the economy in times of recession and to revive domestic demand.On the external side,the Bank's discount rate protected domestic gold from excessive losses after the gold standard was expanded,and attracted foreign idle gold to London for investment at special times.It can be said that the Bank in this period to some extent replaced the government to regulate the market economy.In this article,through detailed analysis of the Bank during the crisis and the stable period of the discount policy,and proves the Bank's discount policy from scratch,from interference by the government to independent decision,from for preventive measures in response to the development process,we can find that the Bank,using the discount policy is more and more skilled and that is also becoming more and more effective.The invalidation of discount policy must originate from the Bank's improper decision,and the discount policy divorced from the actual market situation will also lead to the deterioration of market conditions.During this period,the Bank used the discount rate to adjust,which was a pioneering process and provided a reference model and a case for the future.It was a very important period.This paper is mainly divided into three parts to demonstrate the effectiveness of the Bank's discount policy,and to sort out the implementation effect and development of the Bank's discount policy based on time.The conclusion of the paper is that the Bank in the era of economic liberalism to some extent replaced the government to regulate the market.The Bank's discount policy can regulate the economy during periods of excessive booms or prolonged busts,and keep gold from running out of steam.However,there is a certain conflict between these two regulation objectives.The Bank's policy cannot completely replace the government's regulation and protection of the market,and it is relatively weak in the face of foreign threats,which also explains the drawbacks of economic liberalism and the reason why Britain was constantly overtaken at the end of the 19th century.