Working Paper: CEPR ID: DP13501
Authors: Debin Ma; Liuyan Zhao
Abstract: This paper provides the first systematic econometric study on the evolution of Chinese silver exchange and monetary regimes during 1898-1933. Using high quality data sets of monthly and daily prices of silver dollars, we apply the threshold autoregressive models to estimate the silver points between Shanghai and other seventeen cities in Northern and Central China. We find a dramatic improvement in monetary integration from the 1910s, consolidated throughout the 1920s and 1930s to rival the global standard. We supplement our analysis with new data sets on volumes and costs of silver flows and with an in-depth historical narrative. Our paper revaluates the efficiency of the silver regime and China’s economic performance in the Republican era.
Keywords: silver standard; silver point; arbitrage; market integration
JEL Codes: E42; F15; N25
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| political disintegration (F55) | monetary integration (F36) |
| banking and financial revolution (G21) | monetary integration (F36) |
| silver point estimates drop (G19) | market integration (F02) |
| domestic financial innovations (F30) | efficiency of the silver regime (H21) |
| warlord era (N44) | efficiency of the silver regime (H21) |