Competing Bimetallic Ratios: Amsterdam, London and Bullion Arbitrage in the Mid-18th Century
AbstractThis article analyzes the stability of bimetallism for countries operating in integrated bullion markets who enact different legal ratios. I articulate a new theoretical framework to demonstrate that two countries can both be bimetallic only if they coordinate their legal ratios. The theoretical framework is applied to the mid-18th century when London’s legal ratio was 3.8% higher than that of Amsterdam. I find that Amsterdam was effectively on the bimetallic standard, whereas London was on a de facto gold standard.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9300.
Date of creation: Jan 2013
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Other versions of this item:
- Nogues-Marco, Pilar, 2013. "Competing Bimetallic Ratios: Amsterdam, London, and Bullion Arbitrage in Mid-Eighteenth Century," The Journal of Economic History, Cambridge University Press, vol. 73(02), pages 445-476, June.
- Pilar Nogues-Marco, 2011. "Competing bimetallic ratios: Amsterdam, London and bullion arbitrage in the 18th century," Working Papers in Economic History wp11-03, Universidad Carlos III, Departamento de Historia Económica e Instituciones.
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- F15 - International Economics - - Trade - - - Economic Integration
- N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
- N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-13 (All new papers)
- NEP-HIS-2013-04-13 (Business, Economic & Financial History)
- NEP-MAC-2013-04-13 (Macroeconomics)
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- Stephen Quinn & William Roberds, 2012. "Responding to a shadow banking crisis: the lessons of 1763," Working Paper 2012-08, Federal Reserve Bank of Atlanta.
- Pilar Nogues-Marco, 2011. "The microeconomics of bullionism : arbitrage, smuggling and silver outflows in Spain in the early 18th century," Working Papers in Economic History wp11-05, Universidad Carlos III, Departamento de Historia Económica e Instituciones.
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