Readings:

  • Albert Fishlow (1985), (Lessons from the Past: Capital Markets During the 19th Century and the Interwar Period,( International Organization 39, pp. 383-439, http://www.jstor.org/view/00208183/dm980251/98p00792/0
  • Douglas Irwin (1998), "Did Late Nineteen Century U.S. Tariffs Promote Infant Industries? Evidence from the Tinplate Industry," NBER Working paper no. 6835 (December), http://www.nber.org/papers/w6835
  • Arthur Bloomfield (1959), Monetary Policy Under the International Gold Standard, New York: Federal Reserve Bank of New York.
  • Hugh Rockoff (1983), "Some Evidence on the Real Price of Gold, Its Costs of Production, and Commodity Prices," in Michael Bordo and Anna Schwartz (eds), A Retrospective on the Classical Gold Standard, Chicago: University of Chicago Press, pp. 613-651.


Questions:

  • Textbooks say that the gold standard had internal mechanisms that worked automatically to maintain both price and balance-of-payments stability. On what grounds do Arthur Bloomfield and Hugh Rockoff challenge this textbook view? Are their points convincing?

Thoughts:

  • The infant-industry argument. Even John Stuart Mill admitted the power and force of the infant-industry argument. Doug Irwin takes it on. How convincing do you find his argument?
  • Are there any truly important differences between late-nineteenth century capital markets and capital markets today. If so, what are the truly important differences?

The classical gold standard in theory, fantasy, and history:
  • Did it work?
  • How did it work in the core?
  • How did it work in the periphery?
  • The "rules of the game"--violated
  • What did central banks do? Stabilized bond prices and mirrored the Bank of England
  • What did the Bank of England do? Avoided gold losses, but what else?