IDEAS home Printed from https://ideas.repec.org/p/ise/gheswp/wp642019.html
   My bibliography  Save this paper

Portugal adoption of the gold standard: political reasons for a monetary choice (1846-1854)

Author

Listed:
  • Rita Martins de Sousa

Abstract

This article analyses the transition from bimetallism to the gold standard in Portugal. The research has emphasised that the high percentage of gold coins in circulation and the network externalities were the main reasons for the de jure adoption of the gold standard in 1854. However, it has not provided a justification for either the appreciation of gold in the Portuguese market in 1847 which was contrary to the international trend or the reasons behind the decision to continue to circulate British gold sovereigns in 1851 when all other foreign coins were withdrawn. We argue that the political pressure applied by groups with ownership of British gold coins explains the transition from bimetallism to the gold standard.

Suggested Citation

  • Rita Martins de Sousa, 2019. "Portugal adoption of the gold standard: political reasons for a monetary choice (1846-1854)," Working Papers GHES - Office of Economic and Social History 2019/64, ISEG - Lisbon School of Economics and Management, GHES - Social and Economic History Research Unit, Universidade de Lisboa.
    • Handle: RePEc:ise:gheswp:wp642019
    as

    Download full text from publisher

    File URL: https://ghes.rc.iseg.ulisboa.pt/wp/wp642019.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Marc Flandreau & Carl-Ludwig Holtfrerich & Harold Douglas James, 2003. "International Financial History in the Twentieth Century : System and Anarchy," SciencePo Working papers Main hal-03416725, HAL.
    2. Flandreau, Marc, 1996. "The French Crime of 1873: An Essay on the Emergence of the International Gold Standard, 1870–1880," The Journal of Economic History, Cambridge University Press, vol. 56(4), pages 862-897, December.
    3. Flandreau, Marc & Oosterlinck, Kim, 2012. "Was the emergence of the international gold standard expected? Evidence from Indian Government securities," Journal of Monetary Economics, Elsevier, vol. 59(7), pages 649-669.
    4. Marie-Thérèse Boyer-Xambeu & Lucien Gillard & Ghislain Deleplace, 1994. "Régimes monétaires, points d'or et « serpent bimétallique » de 1770 à 1870," Revue Économique, Programme National Persée, vol. 45(5), pages 1139-1174.
    5. Maurice Obstfeld & Alan M. Taylor, 2003. "Sovereign risk, credibility and the gold standard: 1870-1913 versus 1925-31," Economic Journal, Royal Economic Society, vol. 113(487), pages 241-275, April.
    6. Michael Schiltz, 2012. "Money on the road to empire: Japan's adoption of gold monometallism, 1873–97," Economic History Review, Economic History Society, vol. 65(3), pages 1147-1168, August.
    7. David Stasavage, 2002. "Credible Commitment in Early Modern Europe: North and Weingast Revisited," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 18(1), pages 155-186, April.
    8. Bordo,Michael D. & Capie,Forrest, 2006. "Monetary Regimes in Transition," Cambridge Books, Cambridge University Press, number 9780521030427.
    9. Mitchener, Kris James & Shizume, Masato & Weidenmier, Marc D., 2010. "Why did Countries Adopt the Gold Standard? Lessons from Japan," The Journal of Economic History, Cambridge University Press, vol. 70(1), pages 27-56, March.
    10. António Portugal Duarte & João Sousa Andrade, 2012. "How the Gold Standard functioned in Portugal: an analysis of some macroeconomic aspects," Applied Economics, Taylor & Francis Journals, vol. 44(5), pages 617-629, February.
    11. Angela Redish, 1995. "The persistence of bimetallism in nineteenth-century France," Economic History Review, Economic History Society, vol. 48(4), pages 717-736, November.
    12. Marc Flandreau, 2003. "Caveat Emptor : Coping with Sovereign Risk under the International Gold Standard," Post-Print hal-03571415, HAL.
    13. Kindleberger, Charles P., 1993. "A Financial History of Western Europe," OUP Catalogue, Oxford University Press, edition 2, number 9780195077384.
    14. Marc Flandreau, 1996. "The Geography of the Gold Standard," Post-Print hal-03398015, HAL.
    15. Flandreau,Marc & Holtfrerich,Carl-Ludwig & James,Harold (ed.), 2003. "International Financial History in the Twentieth Century," Cambridge Books, Cambridge University Press, number 9780521819954.
    16. Sussman, Nathan & Yafeh, Yishay, 2000. "Institutions, Reforms, and Country Risk: Lessons from Japanese Government Debt in the Meiji Era," The Journal of Economic History, Cambridge University Press, vol. 60(02), pages 442-467, June.
    17. Michael D. Bordo, 1995. "The Gold Standard as a `Good Housekeeping Seal of Approval'," NBER Working Papers 5340, National Bureau of Economic Research, Inc.
    18. Marc Flandreau & Clemens Jobst, 2009. "The Empirics of International Currencies: Network Externalities, History and Persistence," Economic Journal, Royal Economic Society, vol. 119(537), pages 643-664, April.
    19. Redish, Angela, 1990. "The Evolution of the Gold Standard in England," The Journal of Economic History, Cambridge University Press, vol. 50(4), pages 789-805, December.
    20. MARTÍNEZ-RUIZ, Elena & NOGUES-MARCO, Pilar, 2018. "The Political Economy of Exchange Rate Stability During the Gold Standard. Spain 1874—1914," Discussion paper series HIAS-E-75, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    21. Friedman, Milton, 1990. "Bimetallism Revisited," Journal of Economic Perspectives, American Economic Association, vol. 4(4), pages 85-104, Fall.
    22. Michael D. Bordo, 2003. "Exchange Rate Regime Choice in Historical Perspective," NBER Working Papers 9654, National Bureau of Economic Research, Inc.
    23. Flandreau, Marc, 1998. "The burden of intervention: externalities in multilateral exchange rates arrangements," Journal of International Economics, Elsevier, vol. 45(1), pages 137-171, June.
    24. 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(2), pages 445-476, June.
    25. Marc Flandreau, 1998. "The Burden of Intervention : Externalities in Multilateral Exchange Rates Arrangements," Post-Print hal-03416385, HAL.
    26. Michael D. Bordo, 2003. "Exchange Rate Regime Choice in Historical Perspective," IMF Working Papers 2003/160, International Monetary Fund.
    27. Marc Flandreau, 1996. "The French Crime of 1873: An Essay on the Emergence of the International Gold Standard, 1870-1880," Post-Print hal-03416270, HAL.
    28. Bordo, Michael D. & Rockoff, Hugh, 1996. "The Gold Standard as a “Good Housekeeping Seal of Approvalâ€," The Journal of Economic History, Cambridge University Press, vol. 56(2), pages 389-428, June.
    29. Meissner, Christopher M., 2005. "A new world order: explaining the international diffusion of the gold standard, 1870-1913," Journal of International Economics, Elsevier, vol. 66(2), pages 385-406, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kramer, Bert S. & Milionis, Petros, 2022. "Democratic constraints and adherence to the classical gold standard," Explorations in Economic History, Elsevier, vol. 84(C).
    2. Michael D. Bordo & Christopher M. Meissner & Marc D. Weidenmier, 2006. "Currency Mismatches, Default Risk, and Exchange Rate Depreciation: Evidence from the End of Bimetallism," NBER Working Papers 12299, National Bureau of Economic Research, Inc.
    3. Roldan Alba, 2022. "The Golden Fetters in the Mediterranean Periphery. How Spain and Italy Overcame Business Cycles Between 1870 and 1913?," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 16(1), pages 170-193, January.
    4. Matthias Morys, 2007. "The emergence of the Classical Gold Standard," Working Papers 7010, Economic History Society.
    5. Meissner, Christopher M., 2005. "A new world order: explaining the international diffusion of the gold standard, 1870-1913," Journal of International Economics, Elsevier, vol. 66(2), pages 385-406, July.
    6. Andre Varella Mollick, 2016. "Adoption of the Gold Standard and Real Exchange Rates in the Core and Periphery, 1870–1913," International Finance, Wiley Blackwell, vol. 19(1), pages 89-107, April.
    7. Flandreau, Marc & Oosterlinck, Kim, 2012. "Was the emergence of the international gold standard expected? Evidence from Indian Government securities," Journal of Monetary Economics, Elsevier, vol. 59(7), pages 649-669.
    8. Bordo, Michael D. & Schwartz, Anna J., 1999. "Monetary policy regimes and economic performance: The historical record," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 3, pages 149-234, Elsevier.
    9. Christopher M. Meissner, 2002. "A New World Order: Explaining the Emergence of the Classical Gold Standard," NBER Working Papers 9233, National Bureau of Economic Research, Inc.
    10. António Portugal Duarte & João Sousa Andrade, 2012. "How the Gold Standard functioned in Portugal: an analysis of some macroeconomic aspects," Applied Economics, Taylor & Francis Journals, vol. 44(5), pages 617-629, February.
    11. Grossman, Richard S. & Imai, Masami, 2009. "Japan's return to gold: Turning points in the value of the yen during the 1920s," Explorations in Economic History, Elsevier, vol. 46(3), pages 314-323, July.
    12. Karaman, K. Kıvanç & Pamuk, Şevket & Yıldırım-Karaman, Seçil, 2020. "Money and monetary stability in Europe, 1300–1914," Journal of Monetary Economics, Elsevier, vol. 115(C), pages 279-300.
    13. Flandreau, Marc & Zumer, Frederic & Accominotti, Olivier & Rezzik, Riad, 2008. "Black Man?s Burden: Measured Philanthropy in the British Empire, 1880-1913," CEPR Discussion Papers 6811, C.E.P.R. Discussion Papers.
    14. Marc Flandreau, Kim Oosterlinck, 2011. "Was the Emergence of the International Gold Standard Expected? Melodramatic Evidence from Indian Government Securities," IHEID Working Papers 01-2011, Economics Section, The Graduate Institute of International Studies.
    15. Prasanna Gai & Gavin Cameron & Kang Yong Tan, 2009. "Sovereign Risk in the Classical Gold Standard Era," The Economic Record, The Economic Society of Australia, vol. 85(271), pages 401-416, December.
    16. Manmohan Agarwal, 2017. "The Operation of the Gold Standard in the Core and the Periphery Before the First World War," Working Papers id:12074, eSocialSciences.
    17. Daniela Bragoli & Camilla Ferretti & Piero Ganugi & Giancarlo Ianulardo, 2013. "Monetary regimes and statistical regularity: the Classical Gold Standard (1880-1913) through the lenses of Markov models," Discussion Papers 1301, University of Exeter, Department of Economics.
    18. Ma, Debin & Zhao, Liuyan, 2019. "A Silver Transformation: Chinese Monetary Integration in Times of Political Disintegration during 1898-1933," CEPR Discussion Papers 13501, C.E.P.R. Discussion Papers.
    19. Mitchener, Kris James & Pina, Gonçalo, 2020. "Pegxit pressure," Journal of International Money and Finance, Elsevier, vol. 107(C).
    20. Flandreau, Marc & Chavaz, Matthieu, 2016. "“High & Dry†: The Liquidity and Credit of Colonial and Foreign Government Debt and the London Stock Exchange (1880-1910)," CEPR Discussion Papers 11679, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    PMonetary history; Gold standard; Portugal; nineteenth century JEL classification: N13; N20; E42;
    All these keywords.

    JEL classification:

    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ise:gheswp:wp642019. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Natalia Nobre (email available below). General contact details of provider: https://aquila.iseg.ulisboa.pt/aquila/research/ghes .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.