Interest-parity conditions during the era of the classical gold standard (1880–1914)- evidence from the investment demand for bills of exchange in Europe

Herger, Nils (2018). Interest-parity conditions during the era of the classical gold standard (1880–1914)- evidence from the investment demand for bills of exchange in Europe. Swiss journal of economics and statistics, 154(9), pp. 1-12. Springer 10.1186/s41937-017-0008-5

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This paper examines interest-parity conditions that arguably held as regards the investment demand for bills of exchange during the classical gold standard (1880–1914). Contemporaneous guides to the foreign exchanges report that close connections between the exchange and discount rates arose mainly with bills traded in London and the major financial centres on the European continent. As implied by the interest-parity condition, and in particular when future exchange-rate movements were covered by a suitable long-bill transaction, weekly data do suggest that between Paris, Amsterdam, Berlin, Brussels, and London, the return from discounting bills of exchange in the local money market was roughly equivalent to the return from investing in foreign currency bills.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Herger, Nils

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

2235-6282

Publisher:

Springer

Language:

English

Submitter:

Dino Collalti

Date Deposited:

25 Jun 2019 07:00

Last Modified:

12 Nov 2019 15:49

Publisher DOI:

10.1186/s41937-017-0008-5

BORIS DOI:

10.7892/boris.127721

URI:

https://boris.unibe.ch/id/eprint/127721

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