How did International Bimetallism Work? A Monetary Theory

Marc Flandreau

in The Glitter of Gold

Published in print March 2004 | ISBN: 9780199257867
Published online August 2004 | e-ISBN: 9780191601279 | DOI:
 How did International Bimetallism Work? A Monetary Theory

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Chapter 7 provides a model of the operation of bimetallism as a global system, 1850-1870. It argues that the limited impact that the Gold Rush had on price levels can be primarily explained as resulting from a global adjustment process, whereby gold was in part absorbed by gold countries and in part by bimetallic ones, where it displaced silver which got absorbed by silver standard countries: because its effects were spread all over the world, regardless of the underlying standard, the Gold Rush had much more modest effects than contemporary initially feared.

Keywords: Monetary approach to the balance of payments; Gold Rush; Silver Drain; Eastern silver imports; China, India; Tea and Silk; Cairnes; Gresham's Law

Chapter.  9497 words.  Illustrated.

Subjects: Economic History

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