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The Geography of the Gold Standard

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  • Barry Eichengreen and Marc Flandreau.

Abstract

In this paper we chart the geography of the gold standard. We highlight the late date of the move to gold and the variety of transition strategies. Whether a country with a currency convertible into specie operated a gold, silver, or bimetallic standard at mid-century depended not so much on whether it was rich or poor as on the monetary standard of the foreign country or countries to which its transactions were linked. When it came to the distinction between specie convertibility and inconvertibility, however, domestic economic conditions came into play. In particular, there was a strong correlation between economic development, as proxied by the level of per capital incomes, and possession of a convertible Currency. Most countries went onto the gold standard between the 1870s and the first decade of the 20th century. We enumerate the factors propelling this transition and analyze variations in its timing. Factors shaping the course of this transition include the level of economic development, the magnitude of reserves relative to world specie markets, whether reserves were concentrated at the central bank, and the presence or absence of imperial ties.
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Suggested Citation

  • Barry Eichengreen and Marc Flandreau., 1994. "The Geography of the Gold Standard," Center for International and Development Economics Research (CIDER) Working Papers C94-042, University of California at Berkeley.
  • Handle: RePEc:ucb:calbcd:c94-042
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    References listed on IDEAS

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    1. Fishlow, Albert, 1985. "Lessons from the past: capital markets during the 19th century and the interwar period," International Organization, Cambridge University Press, vol. 39(03), pages 383-439, June.
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    3. Nugent, Jeffrey B, 1973. "Exchange-Rate Movements and Economic Development in the Late Nineteenth Century," Journal of Political Economy, University of Chicago Press, vol. 81(5), pages 1110-1135, Sept.-Oct.
    4. Tamim Bayoumi and Barry Eichengreen., 1994. "The Stability of the Gold Standard and the Evolution of the International Monetary System," Center for International and Development Economics Research (CIDER) Working Papers C94-040, University of California at Berkeley.
    5. Tamim Bayoumi and Barry Eichengreen., 1993. "One Money or Many? On Analyzing the Prospects for Monetary Unification in Various Parts of the World," Center for International and Development Economics Research (CIDER) Working Papers C93-030, University of California at Berkeley.
    6. Salant, Stephen W & Henderson, Dale W, 1978. "Market Anticipations of Government Policies and the Price of Gold," Journal of Political Economy, University of Chicago Press, vol. 86(4), pages 627-648, August.
    7. Barry Eichengreen and Beth Simmons., 1993. "International Economics and Domestic Politics: Notes on the 1920s," Center for International and Development Economics Research (CIDER) Working Papers C93-029, University of California at Berkeley.
    8. Jeff Frankel, Steve Phillips, and Menzie Chinn., 1992. "Financial and Currency Integration in the European Monetary System: The Statistical Record," Center for International and Development Economics Research (CIDER) Working Papers C92-005, University of California at Berkeley.
    9. Michele Fratianni & Franco Spinelli, 1984. "Italy in the Gold Standard Period, 1861-1914," NBER Chapters,in: A Retrospective on the Classical Gold Standard, 1821-1931, pages 405-454 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Ogren, Anders, 2006. "Free or central banking? Liquidity and financial deepening in Sweden, 1834-1913," Explorations in Economic History, Elsevier, vol. 43(1), pages 64-93, January.
    2. Christopher M. Meissner, 2003. "Exchange-Rate Regimes and International Trade: Evidence from the Classical Gold Standard Era," American Economic Review, American Economic Association, vol. 93(1), pages 344-353, March.
    3. María Gadea & Marcela Sabaté, 2004. "The European Periphery in the Era of the Gold Standard: The Case of the Spanish Peseta and the Pound Sterling from 1883 to 1931," Open Economies Review, Springer, vol. 15(1), pages 63-85, January.
    4. Meissner, Christopher M. & Oomes, Nienke, 2009. "Why do countries peg the way they peg? The determinants of anchor currency choice," Journal of International Money and Finance, Elsevier, vol. 28(3), pages 522-547, April.
    5. Barry Eichengreen, 1998. "Exchange Rate Stability and Financial Stability," Open Economies Review, Springer, vol. 9(1), pages 569-608, January.
    6. Michael D. Bordo & Marc Flandreau, 2003. "Core, Periphery, Exchange Rate Regimes, and Globalization," NBER Chapters,in: Globalization in Historical Perspective, pages 417-472 National Bureau of Economic Research, Inc.
    7. Matthias Morys, 2012. "The emergence of the Classical Gold Standard," Centre for Historical Economics and Related Research at York (CHERRY) Discussion Papers 12/01, CHERRY, c/o Department of Economics, University of York.
    8. Thomas Plümper and Eric Neumayer, 2008. "Exchange Rate Regime Choice with Multiple Key Currencies," The Institute for International Integration Studies Discussion Paper Series iiisdp264, IIIS.
    9. Tattara, Giuseppe, 2003. "Paper money but a gold debt: Italy on the gold standard," Explorations in Economic History, Elsevier, vol. 40(2), pages 122-142, April.
    10. Ali Coskun Tuncer, 2009. "„What did guide investors decisions” during the classical gold standard era? The case of Ottoman Empire, 1880-1914," SEEMHN papers 2, National Bank of Serbia.
    11. Tunçer, Coşkun, 2012. "Monetary sovereignty during the classical gold standard era: the Ottoman Empire and Europe, 1880-1913," Economic History Working Papers 44725, London School of Economics and Political Science, Department of Economic History.
    12. Ali Coskun Tunçer, 2013. "The Black Swan of the Golden Periphery: The Ottoman Empire during the Classical Gold Standard Era," Working Papers 14, Department of Economic and Social History at the University of Cambridge.
    13. Ögren, Anders, 2003. "Expansion of the Money Supply with a Fixed Exchange Rate: “Free Banking” in Sweden under the Silver and Gold Standards, 1834 – 1913," SSE/EFI Working Paper Series in Economics and Finance 541, Stockholm School of Economics.
    14. Tattara, Giuseppe & volpe, mario, 1997. "Italy, the fiscal dominance model, and the gold standard age," MPRA Paper 37155, University Library of Munich, Germany.
    15. Maurice Obstfeld & Alan M. Taylor, 2003. "Globalization and Capital Markets," NBER Chapters,in: Globalization in Historical Perspective, pages 121-188 National Bureau of Economic Research, Inc.
    16. Michael A. Clemens & Jeffrey G. Williamson, 2000. "Where did British Foreign Capital Go? Fundamentals, Failures and the Lucas Paradox: 1870-1913," NBER Working Papers 8028, National Bureau of Economic Research, Inc.
    17. Susanto Basu & Alan M. Taylor, 1999. "Business Cycles in International Historical Perspective," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 45-68, Spring.
    18. Niall Ferguson & Moritz Schularick, 2005. "The Empire Effect: Country Risk in the First Age of Globalization, 1880-1913," Economic History 0509002, EconWPA.
    19. Antoni Estevadeordal & Brian Frantz & Alan M. Taylor, 2002. "The Rise and Fall of World Trade, 1870-1939," NBER Working Papers 9318, National Bureau of Economic Research, Inc.
    20. Gérard Marie Henry, 2009. "La lente et irrésistible ascension du dollar des États-Unis au statut de monnaie internationale (1914-1958)," Revue d'Économie Financière, Programme National Persée, vol. 94(1), pages 21-54.
    21. A'Hearn, Brian & Woitek, Ulrich, 2001. "More international evidence on the historical properties of business cycles," Journal of Monetary Economics, Elsevier, vol. 47(2), pages 321-346, April.
    22. Michael D. Bordo & Barry Eichengreen, 1998. "The Rise and Fall of a Barbarous Relic: The Role of Gold in the International Monetary SYstem," NBER Working Papers 6436, National Bureau of Economic Research, Inc.

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    JEL classification:

    • F0 - International Economics - - General
    • N0 - Economic History - - General

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