Equilibrium and adjustment of exchange rates in the Chinese silver standard economy, 1928-1935
Journal
Cliometrica
Journal Volume
7
Journal Issue
1
Pages
87-98
Date Issued
2013
Author(s)
Abstract
We examine the equilibrium and adjustment of exchange rates in the Chinese silver standard economy, 1928-1935. We find a robust long-run relationship between the Chinese dollar exchange rate and the metallic value of the Chinese dollar. The deviation from the equilibrium is short-lived and is quickly eliminated by arbitrage activities. We also find that governmental measures to limit free silver flows can disrupt this equilibrium relationship. ? 2012 Springer-Verlag.
Subjects
Chinese economy; Cointegration; Silver standard
Type
journal article