The Efficiency of the Chinese Silver Standard, 1920–1933

Nuno Palma and Liuyan Zhao

The Journal of Economic History, 2021, vol. 81, issue 3, 872-908

Abstract: We test for integration of financial markets in China during 1920-1933 using a new dataset of domestic exchange rates. Our data concerns tael-denominated telegraphic transfers between Shanghai and nine other cities. We find that Chinese financial markets, as measured by the efficiency of silver-point arbitrage, were highly integrated among major commercial hubs in north and central China, but there was a lower level of integration for more remote cities in the south. Our paper presents the first comprehensive assessment of the efficiency of the Chinese silver standard and contributes to a revaluation of market performance during pre-communist China.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jechis:v:81:y:2021:i:3:p:872-908_7

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