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The Range of Stockholm-Hamburg and Stockholm-London Specie Points 1834–1880

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Growing international trade and investment was one important characteristic of the 19th century international economy. Nevertheless, exchange rates became increasingly stable. This paper explores how decreased costs for transactions in silver and gold contributed to increased exchange rate stability in Sweden between 1845 and 1880. Under a specie standard, transaction costs incurred in silver or gold arbitrage influence the exchange rate range. Two estimates of transaction costs, based on records from the Riksbank and parliamentary auditors, indicate that falling costs of specie transactions and arbitrage narrowed the width of the exchange rate range from 4 to 6.5 per cent to 0.7 to 1 per cent of parity between 1845 and 1880. Decreased commission, brokerage, tax and insurance were the main contributors to integration. Direct transport costs did not contribute to integration to the same extent, as their share of transaction costs was small with regard to silver and gold. The Riksbank played an important role by providing an effective lower intervention point at parity from 1845 until 1870.

Document Type: Research Article

Publication date: 2006-07-01

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  • Founded in 1903, Vierteljahrschrift für Sozial- und Wirtschaftsgeschichte is the oldest German periodical of social and economic history. The international, peer-reviewed journal features original articles in German, English, French and Italian.

    Today, VSWG is edited by Günther Schulz, Jörg Baten, Markus A. Denzel, Gerhard Fouquet and Hans Pohl and deals with all aspects of social history, social developments from the Middle Ages to today, as well as history of finance and economic history.

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