Citation

Discussion Paper Details

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Title: Competing Bimetallic Ratios: Amsterdam, London and Bullion Arbitrage in the Mid-18th Century

Author(s): Pilar Nogues-Marco

Publication Date: January 2013

Keyword(s): arbitrage, bimetallic stability, bullion market integration, melting-minting points, monetary policy and specie-point mechanism

Programme Area(s): Economic History

Abstract: This article analyzes the stability of bimetallism for countries operating in integrated bullion markets who enact different legal ratios. I articulate a new theoretical framework to demonstrate that two countries can both be bimetallic only if they coordinate their legal ratios. The theoretical framework is applied to the mid-18th century when London?s legal ratio was 3.8% higher than that of Amsterdam. I find that Amsterdam was effectively on the bimetallic standard, whereas London was on a de facto gold standard.

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Bibliographic Reference

Nogues-Marco, P. 2013. 'Competing Bimetallic Ratios: Amsterdam, London and Bullion Arbitrage in the Mid-18th Century'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9300