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The Gold Standard as a “Good Housekeeping Seal of Approval”

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  • Bordo, Michael D.
  • Rockoff, Hugh

Abstract

In this article we argue that during the period from 1870 to 1914 adherence to the gold standard was a signal of financial rectitude, a “good housekeeping seal of approval”, that facilitated access by peripheral countries to capital from the core countries of western Europe. Examination of data from nine widely different capital-importing countries, using a model inspired by the Capital Asset Pricing Model, reveals that countries with poor records of adherence were charged considerably more than those with good records, enough to explain the determined effort to stay on gold made by a number of capital-importing countries.

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  • Bordo, Michael D. & Rockoff, Hugh, 1996. "The Gold Standard as a “Good Housekeeping Seal of Approval”," The Journal of Economic History, Cambridge University Press, vol. 56(2), pages 389-428, June.
    • Handle: RePEc:cup:jechis:v:56:y:1996:i:02:p:389-428_01
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    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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