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The international monetary system, 1844-1870: Arbitrage, efficiency, liquidity

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  • Stefano Ugolini

    () (Graduate Institute of International and Development Studies (Geneva))

Abstract

This 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.

Suggested Citation

  • Stefano Ugolini, 2010. "The international monetary system, 1844-1870: Arbitrage, efficiency, liquidity," Working Paper 2010/23, Norges Bank.
  • Handle: RePEc:bno:worpap:2010_23
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    File URL: http://www.norges-bank.no/en/Published/Papers/Working-Papers/2010/WP-201023/
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    Cited by:

    1. Stefano Ugolini, 2011. "Foreign exchange reserve management in the 19th century: The National Bank of Belgium in the 1850s," Working Paper 2011/07, Norges Bank.
    2. Stefano Ugolini, 2012. "The origins of foreign exchange policy: the National Bank of Belgium and the quest for monetary independence in the 1850s," European Review of Economic History, Oxford University Press, vol. 16(1), pages 51-73, February.
    3. Marc Flandreau & Stefano Ugolini, 2014. "The Crisis of 1866," Post-Print hal-01293925, HAL.
    4. Jobst, Clemens & Ugolini, Stefano, 2014. "The coevolution of money markets and monetary policy, 1815-2008," Working Paper Series 1756, European Central Bank.
    5. Vincent Bignon & Marc Flandreau & Stefano Ugolini, 2012. "Bagehot for beginners: the making of lender‐of‐last‐resort operations in the mid‐nineteenth century," Economic History Review, Economic History Society, vol. 65(2), pages 580-608, May.

    More about this item

    Keywords

    International monetary system; financial integration; money markets; bimetallism;

    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

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