Interpreting new evidence about China and U.S. silver purchases

Loren Brandt, Thomas J. Sargent

    Research output: Contribution to journalArticlepeer-review


    This paper offers a reinterpretation of the influence on China of America's silver policy in the early 1930's. Recently compiled evidence about events in China are described and interpreted in light of a model of free banking under a commodity standard. Our interpretation is that the U.S. silver purchase program did not set off a chain of bad economic events which eventually forced China off silver and onto a fiat standard. Rather, China was forced off silver by its own government, which wanted to make itself the beneficiary of the capital gain associated with the appreciation of silver and to relieve itself of the restrictions that are imposed on government finance by a commodity standard.

    Original languageEnglish (US)
    Pages (from-to)31-51
    Number of pages21
    JournalJournal of Monetary Economics
    Issue number1
    StatePublished - Jan 1989

    ASJC Scopus subject areas

    • Finance
    • Economics and Econometrics


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