The Bank of England as the World Gold Market-Maker During the Classical Gold Standard Era, 1889-1910

Stefano Ugolini

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Abstract: This paper studies the microfoundations of the so-called "gold device" policy by analysing a new dataset on the Bank of England's operations in the gold market at the heyday of the classical gold standard. It explains that "gold devices" must be understood in connection to the Bank's role as gold market-maker in London and to the position of London as world gold market. Contrary to the literature, the paper shows that "gold devices" were sophisticated monetary policy tools intended to complement – not to substitute – interest rate policy and aimed at smoothing – not at hampering – international adjustment. These findings demonstrate the potential of adopting a microstructural approach to the study of monetary policy, and call for a reassessment of efficiency measurement for the gold standard.

Keywords: Monetary policy; Gold standard; Gold market; Market microstructure (search for similar items in EconPapers)
Date: 2013
Note: View the original document on HAL open archive server: https://univ-tlse2.hal.science/hal-01293932v1
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Published in Sandra Bott. The Global Gold Market and the International Monetary System from the late 19th Century to the Present, Palgrave Macmillan, pp.64-87, 2013, 978-1-137-30671-5

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Related works:
Chapter: The Bank of England as the World Gold Market Maker during the Classical Gold Standard Era, 1889–1910 (2013)
Working Paper: The Bank of England as the World gold market-maker during the Classical gold standard era, 1889-1910 (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01293932

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