Exchange rate crises with domestic bank runs: Evidence from the 1890S

Miller, Victoria

Exchange rate crises with domestic bank runs: Evidence from the 1890S

No 9315, Cahiers de recherche du Département des sciences économiques, UQAM from Université du Québec à Montréal, Département des sciences économiques

Abstract: Le Sherman Silver Purchase Act de 1890 a causé des craintes d'inflation et une série d'attaques sur les réserves du Trésor Américain. Malgré ces attaques, le dollar s'est maintenu durant cette période. On peut se demander pourquoi. Un argument (Fels (1959)) est que les spéculateurs rationnels ne doutaient pas vraiment que le Trésor s'était engagé envers l'étalon-or. Un autre argument, proposé par Grilli (1990), est que la capacité du Trésor à emprunter a permis au dollar de se maintenir. Ce papier offre une troisième explication. Ici, on propose que l'étalon-or a survécu pendant l'automne 1893 parce qu'une attaque contre le système bancaire a frustré l'attaque contre le dollar.

The Sherman Silver Purchase Act of 1890 led to inflation fears and a series of attacks on the United States Treasury's gold reserves. In spite of these runs, the dollar never devalued during the time. The question remains: why? One argument (Fels (1959)) is that rational speculators dis not really distrust the United States commitment to the gold standard. Another argument proposed by Grilli (1990) is that the Treasury's ability to borrow prevented collapse. This paper offers a third explanation which complements the second. It is argued that the gold standard endured in the fall of 1893 because an internal drain of commercial bank funds stopped and/or prevented the external drain on the central bank's gold tranche.

JEL-codes: F3 G2 (search for similar items in EconPapers)
Date: 1993-12
Note: To receive copy, email author
References: Add references at CitEc
Citations: View citations in EconPapers (11)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cre:uqamwp:9315

Access Statistics for this paper

More papers in Cahiers de recherche du Département des sciences économiques, UQAM from Université du Québec à Montréal, Département des sciences économiques P.O. Box 8888, Downtown Station, Montreal (Canada) Quebec, H3C 3P8. Contact information at EDIRC.
Bibliographic data for series maintained by Stéphane Pallage ().