Central Banking and Vitamin D connection

I just came across this interesting press release from Bank of Finland. It says:

On 27 October 2009, the Bank of Finland Museum will launch its most recent seasonal exhibition, entitled ‘Vitamin D! The Devaluations of 1957 and 1967’. The exhibition will be on display until the end of 2010.

The purpose of the seasonal exhibition is to explain the background to the devaluations in Finland of 1957 and 1967, how the devaluations were brought about and their effect. The exhibitions at to enable the visitor of today to understand the monetary policy environment of a time when parliamentary turnover was so frequent that the average age of a government was only a year.

In the post-war years the Bank of Finland found it had to adjust the external value of the markka countless times. By joining the Exchange Rate Mechanism (ERM) in 1996, stability was brought to the Finnish currency’s value. The euro was adopted, initially as scriptural money in 1999, and subsequently the cash changeover was made at the beginning of 2002. 

Hmm. What I dont understand is this:

The title of the exhibition, with its reference to ‘Vitamin D’, does not seem to have been used to refer to the devaluations of the 1950s and 60s, but by the 1980s it had become a firm part of the economic jargon of the time. 

Now why was it named Vitamin D? Was it because as Vitamin D is crucial for our health so was Vitamin Devaluation necessary for Finnish economy? Or does it stand for something else? I tried doing google search but it was all over the place. Any ideas readers?

Anyways, all this may just sound trivia but it has a lesson for economic history as well. There have been many episodes where central banks have just failed to manage currency levels. Currency failed as a nominal anchor and then central banks moved to price stability/inflation. This includes Finland as well. It could be useful to study Finland’s experience with targeting currency levels.

Also, RBI could plan something like this as part of its Platinum Jubilee Celebrations. It has a museum and it could host such events to educate us more on Indian economic history.


2 Responses to “Central Banking and Vitamin D connection”

  1. Central Banking and Vitamin D connection « Mostly Economics | Money Blog : 10 Dollars : Money Articles. Says:

    […] Originally posted here: Central Banking and Vitamin D connection « Mostly Economics […]

  2. Ava Odoemena Says:

    I know a lot about Vitamin D, and when I found your blog through a search I assumed there was a connection between a failure to supply Vitamin D supplementation in Finland in that time period, and consequently this led to depression in people and then to economic troubles.

    It would have been very interesting:-) Now I’m horribly disappointed, lol.

    And sorry, no, I neither have any idea what the heck they mean. Why not ask them, the Fins almost all speak English. Cheers.

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