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Some Doubts about the Economic Analysis of the Flow of Silver to China in 1550-1820

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  • Jacques Melitz

Abstract

The paper takes issue with the mainstream economic analysis of the enormous flow of silver into China in 1550-1820. First, I challenge the view that arbitrage between gold and silver in European trade with China was important except for one twenty-year spell. Next, I argue that had China imported gold, its history would have been much the same. I also dispute the idea that the persistence of the silver inflows from 1550 to 1820 implies any persistent disequilibrium, and I maintain that economic theory can easily accommodate the view that the inflow of silver into China sponsored growth in China.

Suggested Citation

  • Jacques Melitz, 2017. "Some Doubts about the Economic Analysis of the Flow of Silver to China in 1550-1820," Working Papers 2017-19, CEPII research center.
    • Handle: RePEc:cii:cepidt:2017-19
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    References listed on IDEAS

    as
    1. von Glahn,Richard, 2016. "The Economic History of China," Cambridge Books, Cambridge University Press, number 9781107030565.
    2. von Glahn,Richard, 2016. "The Economic History of China," Cambridge Books, Cambridge University Press, number 9781107615700.
    3. Stephen Broadberry & Hanhui Guan & David Daokui Li, 2017. "China, Europe and the Great Divergence: A Study in Historical National Accounting, 980-1850," Oxford Economic and Social History Working Papers _155, University of Oxford, Department of Economics.
    4. Blitz, Rudolph C., 1967. "Mercantilist Policies and the Pattern of World Trade, 1500–1750," The Journal of Economic History, Cambridge University Press, vol. 27(1), pages 39-55, March.
    5. A. Kobata, 1965. "The Production and Uses of Gold and Silver in Sixteenth-and Seventeenth-Century Japan," Economic History Review, Economic History Society, vol. 18(2), pages 245-266, August.
    6. Jan De Vries, 2010. "The limits of globalization in the early modern world," Economic History Review, Economic History Society, vol. 63(3), pages 710-733, August.
    7. Monroe, Arthur E., 1923. "Monetary Theory Before Adam Smith," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number monroe1923.
    8. Glahn, Richard Von, 1996. "Myth and Reality of China's Seventeenth-Century Monetary Crisis," The Journal of Economic History, Cambridge University Press, vol. 56(2), pages 429-454, June.
    9. Kent G. Deng, 2008. "Miracle Or Mirage? Foreign Silver, China'S Economy And Globalization From The Sixteenth To The Nineteenth Centuries," Pacific Economic Review, Wiley Blackwell, vol. 13(3), pages 320-357, August.
    10. Pradeep Dubey & Siddhartha Sahi & Martin Shubik, 2014. "Minimally Complex Exchange Mechanisms: Emergence of Prices, Markets, and Money," Cowles Foundation Discussion Papers 1945, Cowles Foundation for Research in Economics, Yale University.
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    More about this item

    Keywords

    Silver Flows into China 1550-1820; Silver/Gold Exchange Rates; Transaction Costs in International Trade;
    All these keywords.

    JEL classification:

    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F60 - International Economics - - Economic Impacts of Globalization - - - General

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