Location of Repository

Market Integration in the Golden Periphery - the Lisbon/London Exchange, 1854-1891

By Rui Pedro Esteves, Jaime Reis and Fabiano Ferramosca

Abstract

The existence of a self-regulating arbitrage mechanism under the gold standard has been traditionally considered as one of its main advantages, and attracted a corresponding research interest. This research is arguably relevant not only to test for the efficiency of the “gold points”, but also to study the evolution of financial integration during the so-called first era of globalization. Our first aim with this paper is to contribute to the enlargement of the scope of the literature by considering the case of Portugal that adhered to the system, in 1854, at a much earlier phase than the majority of countries, thus allowing for a broader perspective on the evolution of the efficiency of the foreign exchange market. As a typical “peripheral” country, Portugal can be used as the starting point for a study of the degree of integration of the periphery within the system. Furthermore, the Portuguese exchange also illustrates the role in practice of large players in sustaining currency stability, over and beyond the atomistic forces of arbitrage and speculation assumed in conventional theoretical frameworks. We also address the question of the credibility of the authorities’ commitment to the standard, through the perspective of the target zone literature.

OAI identifier:

Suggested articles

Preview

Citations

  1. (1990). A evolu» c~ ao da oferta monet¶ aria portuguesa 1854-1912",
  2. (1913). A reforma monetaria e as ¯nan» cas em Portugal, Coimbra: Fran» ca & Amado Livreiros Editores.
  3. (1930). A Treatise on Money. Vol II: The Applied Theory of Money,
  4. Agust¶ n (1997), \Terms-of-Trade Variability and Adherence to the Gold Standard: The Cases of Portugal and Spain",
  5. (2002). An \Art", not a \Science"? Central Bank Management
  6. (1990). An Empirical Exploration of Exchange Rate Target-Zones", NBER, Working Paper #
  7. (1988). Arbitrage During the Dollar-Sterling Gold Standard, 1899-1908: An Econometric Approach",
  8. Augusto Carlos Teixeira de (1964), Descri» c~ ao Geral e Hist¶ orica das moedas cunhadas em nome dos reis, regentes e governantes de Portugal,
  9. (1996). Between the dollar-sterling gold points. Exchange rates, parity, and market behavior, Cambridge:
  10. (1993). Bretton Woods and its Precursors: Rules versus Discretion in the History of the International Monetary Regimes",
  11. (1993). Consistency and Limiting Distribution of the Least Squares Estimator of a Threshold Autoregressive Model",
  12. (1996). Credibility and fundamentals: were the Classical and interwar gold standards well-behaved target zones?", in Tamin Bayoumi, Barry Eichengreen and Alan Taylor (eds.), Modern perspectives on the gold standard, Cambridge:
  13. (2003). Crises in the Global Economy from Tulips to Today: Contagion and Consequences"
  14. (1994). Estabilidade monet¶ aria, disciplina or» camental e desempenho econ¶ omico em Portugal desde 1854"
  15. Eug¶ enia (1993), As ¯nan» cas p¶ ublicas portuguesas da Regenera» c~ ao µ a Primeira Guerra Mundial,
  16. Eug¶ enia (2002), \As crises ¯nanceiras no Portugal contempor^ aneo"
  17. Exposi» c~ ao apresentada a S. Ex.a o sr. Ministro da Fazenda pela Direc» c~ ao do Banco de Portugal acerca da aboli» c~ ao do direito que onera a exporta» c~ ao do ouro amoedado,
  18. (2002). Finan» cas p¶ ublicas e crescimento econ¶ omico. O crowding out em Portugal, da Regenera» c~ ao ao ¯nal da Monarquia,
  19. (1978). Foreign Interest Rates in American Financial Markets: A Revised Series of Dollar-Sterling Exchange Rates, 1835-1900",
  20. (1992). Foreign Trade and Economic Growth in the European Periphery:
  21. Francisco Jos¶ e (1898), Curso theorico e pratico de escriptura» c~ ao mercantil por partidas dobradas, mixtas e simples..., Porto: Typographia Ocidental,
  22. (1994). Hist¶ oria da Bolsa de
  23. Isidoro Gomes (1837), Tratado de cambios, Lisbon: Galhardo Irm~ aos.
  24. (1999). L'¶ economie portugaise au XIXe siµ ecle.
  25. (1995). L'or du monde: la France et la stabilit¶ e du systµ eme mon¶ etaire international 1848-1873,
  26. (1998). Limiting properties of the least squares estimator of a continuous threshold autoregressive model",
  27. Manuel Teixeira Cabral de (1823), O guarda-livros moderno ou curso completo de instruc» coens 42elementares sobre as opera» c~ oes do commercio, tanto em mercadorias,
  28. (2004). Measuring Market Integration: Foreign Exchange Arbitrage and the Gold Standard, 1879-1913",
  29. (1990). Non-linear time series: a dynamical approach,
  30. Nuno (coord.) (2001), Portuguese Historical Statistics, Lisbon: Instituto Nacional de Estat¶ stica.
  31. (1997). O ¶ agio do ouro e outros textos econ¶ omicos: 1916-1928,
  32. (1996). O Banco de Portugal: das origens a 1914. Vol I: Antecedentes, funda» c~ ao, consolida» c~ ao, 1821-1857,
  33. (1988). Pentti Saikkonen and Timo TerÄ asvirta
  34. (1994). R¶ egimes mon¶ etaires, points d'or et \serpent bim¶ etallique" de 1770 µ a 1870", Revue Economique,
  35. (1993). Stochastic Devaluation Risk and the Empirical Fit of Target-zone Models",
  36. (1988). Stock Prices do not Follow Random Walks: Evidence from a Simple Speci¯cation Test",
  37. (1991). Target Zones and Exchange Rate Dynamics",
  38. (2003). Target Zones in History and Theory: Lessons from an AustroHungarian Experiment (1896-1914)",
  39. (1995). The anatomy of an international monetary regime: the classical gold standard,
  40. (1996). The French Crime of 1873: An Essay on the Emergence of the International Gold Standard, 1870-1880",
  41. (1996). The Gold Standard as a \Good Housekeeping Seal of Approval"",
  42. (1995). The Gold Standard as a Rule: An Essay in Exploration",
  43. (2000). The gold standard in Portugal, 1854-91",
  44. (1971). The Portugal trade: a study of Anglo-Portuguese commerce,
  45. (1991). The Simplest Test of Target Zone Credibility",
  46. (1984). Violations of the Gold Points, 1890-1908",

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.