Trade Effects of Silver Price Fluctuations in 19th Century China: A Macro Approach

Makram El-Shagi and Zhang Lin
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Zhang Lin: Center for Financial Development and Stability at Henan University, Kaifeng, Henan

No 2017/5, CFDS Discussion Paper Series from Center for Financial Development and Stability at Henan University, Kaifeng, Henan, China

Abstract: We assess the role of silver price fluctuations on Chinese trade and GDP during the late Qing dynasty, when China still had a bimetallic monetary system where silver was mostly used for trade. Using a structural VAR with a newly proposed small sample bias correction and blockwise recursive identification, we identify the impact of silver price shocks o the Chinese economy from 1867 to 1910. We find that silver price changes have substantial impact on trade, but barely affect GDP. Our results can partly be applied to the analysis of the role of vehicle currencies in today's emerging economies.

Keywords: vehicle currency; China; SVAR; small sample (search for similar items in EconPapers)
JEL-codes: C32 F14 F31 F41 N15 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2017-12
New Economics Papers: this item is included in nep-cna and nep-his
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http://cfds.henuecon.education/images/dpaper/WP_5_2017_Silver_China.pdf First version, 2017 (application/pdf)

Related works:
Journal Article: Trade effects of silver price fluctuations in 19th-century China: A macro approach (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:fds:dpaper:201705

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