publication . Preprint . Article . 2009

International Reserves Crises, Monetary Integration and the Payments System during the International Gold Standard

Open Access
  • Published: 01 Jul 2009
<jats:p>I model an international payments system with a financial center and periphery to reproduce various aspects of the International Gold Standard. This period was characterized by frequent crises associated with scarce stocks of reserves, high short-term interest rates with subsequent gold inflows, and transmission of output contractions across countries. I find that a common international currency and no legal restrictions on exchange help the periphery share reserves with the financial center, improving the world's welfare and mitigating output losses due to reserve crises. Also, the center has incentives for restrictive rediscounting while the periphery ...
free text keywords: International Gold Standard, International payments systems, International reserve crises, Monetary integration, jel:E32, jel:E42, jel:E58, jel:F33, Economics and Econometrics
Related Organizations

Bordo, Michael D. (1984) The Gold Standard: The Traditional Approach. In Michael D. Bordo and Anna J. Schwartz (eds.) A Retrospective on the Classical Gold Standard, 1821-1931, pp. 23-113. Conference Report, National Bureau of Economic Research (The University of Chicago Press, Chicago and London), Champ, Bruce, Bruce D. Smith and Stephen Williamson (1996) Currency Elasticity and banking panics: theory and evidence. Canadian Journal of Economics XXIX, No. 4, pp. 828- 864.

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