Exchange-Rate Regimes and International Trade: Evidence from the=20 Classical Gold Standard Era

J. Ernesto L=F3pez-C=F3rdova and Christopher Meissner
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J. Ernesto L=F3pez-C=F3rdova: Inter-American Development Bank

Labor and Demography from University Library of Munich, Germany

Abstract: In this paper we show that the spread of the classical gold=20 standard in the late nineteenth century increased international trade=20 flows. This positive effect was compounded whenever a group of countries=20 formed a monetary union. Applying the gravity model of trade to more than=20 1,100 country pairs during the 1870-1910 period, we find that two countries= =20 on gold would trade 60 percent more with each other than with countries on= =20 a different monetary standard. Moreover, a monetary union would more than=20 double bilateral trade flows. Our findings are relevant for current=20 discussions on alternative monetary arrangements for the twenty-first= century.

JEL-codes: F33 N21 N23 N26 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2001-02-09
New Economics Papers: this item is included in nep-ifn
Note: 52 pages, Acrobat .pdf
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpla:0012003

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