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The Chinese silver standard economy and the 1929 Great Depression
Author(s) -
Lai Chengchung,
Gau Joshua JrShiang
Publication year - 2003
Publication title -
australian economic history review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.493
H-Index - 16
eISSN - 1467-8446
pISSN - 0004-8992
DOI - 10.1111/1467-8446.t01-1-00048
Subject(s) - great depression , economics , counterfactual thinking , gold standard (test) , depression (economics) , argument (complex analysis) , china , balance of trade , chinese economy , standard deviation , industrial production , macroeconomics , economy , statistics , mathematics , psychology , biochemistry , chemistry , archaeology , social psychology , political science , law , history
It is often argued that the silver standard insulated the Chinese economy from the Great Depression that prevailed in the gold standard countries during the period 1929–1935. Using econometric testing and counterfactual simulations, this article shows that if China had been on the gold standard (or on the gold‐exchange standard), the balance of trade of this semiclosed economy would have been ameliorated, but the general price level would have declined significantly. Due to limited statistics, two important variables (GDP and industrial production) are not included in the analysis, but the general argument that the silver standard was a lifeboat to the Chinese economy remains defensible.