Discussion paper

DP9300 Competing Bimetallic Ratios: Amsterdam, London and Bullion Arbitrage in the Mid-18th Century

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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Citation

Nogues-Marco, P (2013), ‘DP9300 Competing Bimetallic Ratios: Amsterdam, London and Bullion Arbitrage in the Mid-18th Century‘, CEPR Discussion Paper No. 9300. CEPR Press, Paris & London. https://cepr.org/publications/dp9300