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Competing Bimetallic Ratios: Amsterdam, London, and Bullion Arbitrage in Mid-Eighteenth Century

Published online by Cambridge University Press:  23 May 2013

Pilar Nogues-Marco
Pilar Nogues-Marco*
Affiliation:
Assistant Professor at the Universidad Carlos III de Madrid, C/Madrid 126, 28903 Getafe (Madrid) Spain; and Research Affiliate at CEPR, London. E-mail: mnogues@clio.uc3m.es.
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Abstract

This article analyzes the stability of bimetallism for countries operating in integrated bullion markets that 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-eighteenth century when London's legal ratio was 3.8 percent higher than that of Amsterdam. I find that Amsterdam was effectively on the bimetallic standard, whereas London was on a de facto gold standard.

Type
Articles
Information
The Journal of Economic History , Volume 73 , Issue 2 , June 2013 , pp. 445 - 476
Copyright
Copyright © The Economic History Association 2013 

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Footnotes

The author is currently involved in the ECO2009-08791 and HAR2010-17482 research projects. Part of this article was written while the author was being funded by AGAUR grant BE-2008. Funding for the data collection was provided by the Chaire Finances Internationales, Sciences-Po Paris. Earlier versions of this article were presented at the UC3M Workshop (February 2011), the Madrid fresh meeting (March 2011), the Economic and Social History Seminar at Oxford (May 2011), and the Dublin EHES Conference (September 2011). The author is grateful for the discussions and comments from seminar participants. The author would especially like to thank Marc Flandreau, Larry Neal, and Nick Mayhew. The author is also very grateful to Jean-Laurent Rosenthal and the anonymous reviewers for assisting her in improving this article. The author is responsible for any errors or misinterpretations.

References

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