Familiarity, Convenience, and Commodity Money: Spanish and Mexican Silver Dollars in Qing and Republican China
33 Pages Posted: 28 Jun 2009 Last revised: 10 May 2024
Date Written: June 05, 2024
Abstract
We study the relative prices of foreign silver coins circulating in China during the period from 1866 to 1924. Spanish and Mexican silver dollar coins often traded at substantial premiums sometimes exceeding 30% and 12% respectively. These premiums are associated with measures of global economic and political conditions, rise with proxies for Chinese political and banking uncertainty, and reflect seasonal production cycles and market conditions for China's export commodities. Diagnostic tests based on predictions for the value of non-silver money and for imports largely confirm our interpretation.
Keywords: China, silver, silver dollar, Spanish piece of eight, silk, alternative currencies
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