Grasping Reality on TypePad, by Brad DeLong

I'm filling in for Barry Eichengreen: he has the flu.

Jan. 24. The First Age of Globalization [Eichengreen DeLong]

Albert Fishlow (1985), "Lessons from the Past: Capital Markets During the 19th Century and the Interwar Period," International Organization 39, pp. 383-439, http://www.jstor.org/view/00208183/dm980251/98p00792/0
Douglas Irwin (1998), "Did Late Nineteen Century U.S. Tariffs Promote Infant Industries? Evidence from the Tinplate Industry," NBER Working paper no. 6835 (December), http://www.nber.org/papers/w6835
Arthur Bloomfield (1959), Monetary Policy Under the International Gold Standard, New York: Federal Reserve Bank of New York, selections, on reserve at Haas.
Hugh Rockoff (1983), "Some Evidence on the Real Price of Gold, Its Costs of Production, and Commodity Prices," in Michael Bordo and Anna Schwartz (eds), A Retrospective on the Classical Gold Standard, Chicago: University of Chicago Press, pp. 613-651, on reserve at Haas.

Questions:

Textbooks say that the gold standard had internal mechanisms that worked automatically to maintain both price and balance-of-payments stability. On what grounds do Arthur Bloomfield and Hugh Rockoff challenge this textbook view? Are their points convincing?

Thoughts:

• The infant-industry argument. Even John Stuart Mill admitted the power and force of the infant-industry argument. Doug Irwin takes it on. How convincing do you find his argument?

• Are there any truly important differences between late-nineteenth century capital markets and capital markets today. If so, what are the truly important differences?

• The classical gold standard in theory and history

  • Did it work?
  • How did it work in the core?
  • How did it work in the periphery?
  • The "rules of the game"--violated
  • What did central banks do?
    • Stabilized bond prices
    • Mirrored the Bank of England
    • What did the Bank of England do?
      • Avoided gold losses...
      • ???