In this paper we show that the spread of the classical gold=20 standard in the late nineteenth century increased international trade=20 flows. This positive effect was compounded whenever a group of countries=20 formed a monetary union. Applying the gravity model of trade to more than=20 1,100 country pairs during the 1870-1910 period, we find that two countries= =20 on gold would trade 60 percent more with each other than with countries on= =20 a different monetary standard. Moreover, a monetary union would more than=20 double bilateral trade flows. Our findings are relevant for current=20 discussions on alternative monetary arrangements for the twenty-first= century.
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Paper provided by EconWPA in its series Labor and Demography with number
0012003.
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Kevin H. O'Rourke & Jeffrey G. Williamson, 2000.
"When Did Globalization Begin?,"
NBER Working Papers
7632, National Bureau of Economic Research, Inc.
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