Pax Britanica and the gold Standard

Pax Britanica and the gold Standard - Pax Britanica : the...

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Pax Britanica : the Gold Standard Changes in the Monetary Regime : given what we have seen with trade The monetary regime supports trade and investments You need some needs of payment to conduct successful payments The monetary regime is the foundation with the other things that evolved Trade was expanding after the 1840s How did they make international payments? The gold Standard : Gold as the medium of exchange It is simple of theory : gold is the medium in exchange When you make some international payment : you convert your domestic money , you convert it into gold and then you use it for payments on trade, and then this persons converts the gold in the domestic bank and receives domestic money Ideological roots in the Classical Liberalism : the same idea of Adam Smith. Gold : everyone has confidence in it Gold standard was : A market solution : it works through the market Self equilibrating A corrective mechanism Central banks play the leading role Hume’s price specie flow mechanism : how countries were making payments internationally and why liberalists though it was so great Trade flow : example Britain sells some manufacture goods to France, France must pay some
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This note was uploaded on 02/06/2012 for the course POLI 354 taught by Professor Brawley during the Fall '11 term at McGill.

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Pax Britanica and the gold Standard - Pax Britanica : the...

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