The international monetary system, 1844-1870: Arbitrage, efficiency, liquidity
AbstractThis paper analyses the architecture of the international monetary system which preceded the international gold standard (1844-1870). It builds on a newly-created database made up of more than 100,000 weekly observations on exchange rates, interest rates, and bullion prices in the world’s six most important financial centers of the time. Market integration, substitutability of money market instruments, choice of the correct monetary standard reference, and currency liquidity are tested; moreover, an historical analysis is run, with special reference to financial crises. Contrary to received wisdom, the results point to a trend towards increasing multipolarism in the international monetary system before 1870.
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Bibliographic InfoPaper provided by Norges Bank in its series Working Paper with number 2010/23.
Length: 35 pages
Date of creation: 23 Nov 2010
Date of revision:
International monetary system; financial integration; money markets; bimetallism;
Find related papers by JEL classification:
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- F31 - International Economics - - International Finance - - - Foreign Exchange
- N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-04 (All new papers)
- NEP-HIS-2010-12-04 (Business, Economic & Financial History)
- NEP-IFN-2010-12-04 (International Finance)
- NEP-MAC-2010-12-04 (Macroeconomics)
- NEP-MON-2010-12-04 (Monetary Economics)
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