scholarly journals International Financial Market Integration, Asset Compositions, and the Falling Exchange Rate Pass-Through

2017 ◽  
Author(s):  
Almira Enders ◽  
Zeno Enders ◽  
Mathias Hoffmann
Keyword(s):  
Exchange Rate ◽  
Financial Market ◽  
Market Integration ◽  
International Financial Market ◽  
Financial Market Integration ◽  
Pass Through ◽  
Exchange Rate Pass Through

International credit market integration in northwestern Europe in the 1670s

2019 ◽  
Vol 26 (2) ◽  
pp. 127-145
Author(s):  
Ling-Fan Li
Keyword(s):  
Exchange Rate ◽  
Transaction Cost ◽  
Financial Market ◽  
Market Integration ◽  
Credit Markets ◽  
Credit Market ◽  
Disruptive Effect ◽  
Speed Of Adjustment ◽  
Financial Market Integration ◽  
International Credit

This article studies the financial market integration in the 1670s by examining the effectiveness of triangular exchange arbitrage. The results suggest that international credit markets based on bills of exchange in northwestern Europe were well integrated and responded to exchange-rate differences quickly. The speed of adjustment, ranging between one and three weeks, accorded with the speed of communication, but the transaction cost associated with exchange arbitrage was much lower than that of shipping bullion. Although warfare had a disruptive effect on exchange arbitrage by increasing transaction cost, markets were resilient in remaining efficient.

Sign in / Sign up

Export Citation Format

Share Document