Silver fetters? The rise and fall of the Chinese price level 1928-34
Journal
Explorations in Economic History
Journal Volume
50
Journal Issue
3
Pages
446-462
Date Issued
2013
Author(s)
Lai C.-C.
Abstract
We show how the silver standard transmitted world silver price fluctuations into China and made the Chinese price level closely linked to the world silver price. Inflation was transmitted between 1929 and 1931 when the world silver price was falling; while deflation was transmitted during 1932 and 1934 when the world silver price was rising. Using micro-level evidence and counterfactual simulations, we show that the exchange rate was the main shock transmission channel, and silver stocks played an insignificant role. ? 2013 Elsevier Inc.
Subjects
Chinese economy; Counterfactual response; Silver standard; Structural VAR
Type
journal article