Silver Points, Silver Flows, and the Measure of Chinese Financial Integration

29 Pages Posted: 24 Oct 2016

See all articles by David S. Jacks

David S. Jacks

Simon Fraser University (SFU) - Department of Economics; National Bureau of Economic Research (NBER)

Se Yan

Peking University - Guanghua School of Management

Liuyan Zhao

Peking University - School of Economics

Date Written: October 2016

Abstract

To what degree were Chinese financial markets integrated with the rest of the world prior to the 1949 Revolution and to what extent was the Chinese foreign exchange market efficient during this period? We estimate silver points for the Shanghai market from 1905 to 1933 to answer these questions. Our inferred measures are small in value, favorably match measured costs of the silver trade derived from contemporary accounts, and fare well in the comparison to estimates of trans-Atlantic gold points. This leads to the conclusion that the degree of Chinese financial market integration was substantial. However, during and immediately after World War I, our estimates of the silver points increased appreciably, foreshadowing the collapse of China’s linkages to world financial markets beginning in the 1930s.

Suggested Citation

Jacks, David S. and Yan, Se and Zhao, Liuyan, Silver Points, Silver Flows, and the Measure of Chinese Financial Integration (October 2016). NBER Working Paper No. w22747. Available at SSRN: https://ssrn.com/abstract=2858058

David S. Jacks (Contact Author)

Simon Fraser University (SFU) - Department of Economics ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Se Yan

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

Liuyan Zhao

Peking University - School of Economics ( email )

Beijing
China

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