Chapter

Gold–Silver Points: Domestic Arbitrages and the Bimetallic System

Marc Flandreau

in The Glitter of Gold

Published in print March 2004 | ISBN: 9780199257867
Published online August 2004 | e-ISBN: 9780191601279 | DOI: http://dx.doi.org/10.1093/0199257868.003.0003
 Gold–Silver Points: Domestic Arbitrages and the Bimetallic System

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Chapter 2 studies the arbitrage mechanism between gold and silver monies at the national level, focusing on the French experience 1848-1870. It shows that, when the effects of the California and Australia gold discoveries combined with the existence of transaction costs contributed to a regionalization of the circulation by currency types in bimetallic economies, rather than to the displacement of silver by gold. As a result, gold became predominant in advanced regions, while silver remained in rural areas.

Keywords: Bimetallic Arbitrage; Shipping; Monetary Geography; Bullion markets; Circulation; Money balances

Chapter.  8974 words.  Illustrated.

Subjects: Economic History

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