1861

Abstract

We apply the outlier methodology to the issue of the regulation of Bimetallism. Did French and British central banks use their discount rates as a policy tool for currency stabilization over the period 1850–1870? The common view identifies Bimetallism as a pure automatic system constrained by specie points. Using outliers methodology we give evidence that the influence of the discount rate differential between France and England on the Sterling–Franc spot exchange rate was taken in default only on one occasion, on February 1861. The assessment of the historical context helps to understand this peculiar event which was only transitory. This article is an illustration of the importance of the outlier methodology in cliometrics as a mean to test conventional wisdom in economic history.

Notes

¹ For the reader interested in other cliometric applications and a complete mathematical and statistical presentation of the outlier methodology, please cf. Darné and Diebolt (2004, 2006).

² Le Moniteur industriel became in 1863 Le Moniteur des intérêts financiers et industriels. The most famous financial newsarticle of the time, Le moniteur des intérêts matériels, often cited in the literature, could not be consulted since the first edition started in 1873. Le Moniteur des tirages financiers could neither be exploited since its first publication is in date of 1863.