Adjusting to the Gold Rush: Endogenous Bullion Points and the French Balance of Payments: 1846-1870

Marc Flandreau ()
Additional contact information
Marc Flandreau: Sciences Po - Sciences Po, Centre for Finance and Development - GRADUATE INSTITUTE OF INTERNATIONAL AND DEVELOPMENT STUDIES

SciencePo Working papers Main from HAL

Abstract: In this paper, we lay the foundations of bullion points theory in the context of exchange rate analysis between bimetallic and monometallic nations. The theory is then applied to the study of the Paris-London exchange rates between 1846 and 1870. In particular, we show that both the position and spread of bullion points between monometallic and bimetallic nations reacted endogenously to shocks on international gold and silver markets. The distance between the upper and lower specie points tended to shrink when large disequilibria occurred on world bullion markets, and to expand when these disequilibria receded. Second, we show that bullion points constrictions and dilations as well as exchange rate movements triggered specie flows in and out of France, as a way to stabilize initial imbalances. France acted as the arbitrageur of last resort between the gold and silver segments of the international monetary system, and this in turn placed a substantial amount of 'endogenous' pressure on its monetary system

Date: 1996-10
Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-03417491
References: Add references at CitEc
Citations:

Published in Explorations in Economic History, 1996, 33 (4), pp.417 - 439. ⟨10.1006/exeh.1996.0023⟩

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:hal:spmain:hal-03417491

DOI: 10.1006/exeh.1996.0023

Access Statistics for this paper

More papers in SciencePo Working papers Main from HAL
Bibliographic data for series maintained by Contact - Sciences Po Departement of Economics ().