Discussion Paper Details

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Title: Some doubts about the economic analysis of the flow of silver to China in 1550-1820

Author(s): Jacques Melitz

Publication Date: November 2017

Keyword(s): silver flows into China 1550-1820, silver/gold exchange rates and transaction costs in international trade

Programme Area(s): Economic History and International Macroeconomics and Finance

Abstract: The paper takes issue with the mainstream economic analysis of the enormous flow of silver into China in 1550-1820. First, I challenge the view that arbitrage between gold and silver in European trade with China was important except for one twenty-year spell. Next, I argue that had China imported gold, its history would have been much the same. I also dispute the idea that the persistence of the silver inflows from 1550 to 1820 implies any persistent disequilibrium, and I maintain that economic theory can easily accommodate the view that the inflow of silver into China sponsored growth in China.

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Bibliographic Reference

Melitz, J. 2017. 'Some doubts about the economic analysis of the flow of silver to China in 1550-1820'. London, Centre for Economic Policy Research.