Discussion paper

DP14860 The efficiency of the Chinese silver standard, 1920-33

We test for integration of financial markets in China during 1920-1933 using a new dataset of domestic exchange rates. Our data concerns tael-denominated telegraphic transfers between Shanghai and nine other cities. We find that Chinese financial markets, as measured by the efficiency of silver-point arbitrage, were highly integrated among major commercial hubs in north and central China, but there was a lower level of integration for more remote cities in the south. Our paper presents the first comprehensive assessment of the efficiency of the Chinese silver standard, and contributes to a revaluation of market performance during pre-communist China

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Citation

Palma, N and L Zhao (eds) (2020), “DP14860 The efficiency of the Chinese silver standard, 1920-33”, CEPR Press Discussion Paper No. 14860. https://cepr.org/publications/dp14860