Chapter 1 describes the international monetary landscape between 1848 and 1873. The prominent role of bullion is emphasized. It also reviews existing theories of the operation of a bimetallic system. The main point is that a bimetallic system rests on bimetallic arbitrage: agents will buy the depreciating metal and sell the appreciating one, herby stabilizing their relative value. This suggest that it is key to study the actual operation of bimetallic arbitrage.
Keywords: Bimetallic Arbitrage; Bullion; Walras, Fisher, Friedman; General Equilibrium; Monetarism; Coordination; Government intervention; Gresham's Law
Chapter. 6516 words. Illustrated.
Subjects: Economic History
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