Equilibrium and adjustment of exchange rates in the Chinese silver standard economy, 1928-1935

TAI-KUANG HOLai C.Gau J.J.2019-10-222019-10-22201318632505https://www2.scopus.com/inward/record.uri?eid=2-s2.0-84871938211&doi=10.1007%2fs11698-012-0079-6&partnerID=40&md5=787e2a264932e95916da4a10d50fd7e6https://scholars.lib.ntu.edu.tw/handle/123456789/427095We 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.Chinese economy; Cointegration; Silver standardEquilibrium and adjustment of exchange rates in the Chinese silver standard economy, 1928-1935journal article10.1007/s11698-012-0079-618037191500