As its central feature, a bimetallic standard grants nominal debtors an option to deliver either of two metals. With results from the option pricing literature, construction of a formula to evaluate the bimetallic option in debt instruments is straightforward. With this formula, one can compute the option value in a wide range of nineteenth-century U.S. Treasury securities. Posession of the option values permits an adjustment of the yields on U.S. securities to make them comparable to yields on nonmetallic European securities. Evaluating the option allows the estimation of transfers from debtors to creditors. Copyright 1986 by American Economic Association.

A bimetallic standard grants nominal debtors an option to deliver either of two metals. Construction of theoretical bimetallic option values allows the computation of the option value implicit in nineteenth-century U.S. securities. Appropriate yield adjustments permit a comparison of U.S. and monometallic European security yields. Yields on antebellum U.S. securities are close to British yields. Evaluating the option also allows the estimation of wealth transfers from shifts in the monetary standards during the nineteenth-century silver agitation.

Though it is always mentioned first among the list of obvious manias, no serious effort has ever been expended to investigate the market fundamentals that might have driven the tulip speculation. This paper compiles time series on individual tulip prices and examines market fundamentals potentially driving prices. Most of the "tulipmania" was not obvious madness. High but rapidly depreciating prices for rare bulbs is a typical pattern in the flower bulb industry. Only the last month of the speculation, during which common bulb prices increased rapidly and crashed, remains as a potential bubble.

Though it is always mentioned first among the list of obvious manias, no serious effort has ever been expended to investigate the market fundamentals that might have driven the tulip speculation. This paper compiles time series on individual tulip prices and examines market fundamentals potentially driving prices. Most of the "tulipmania" was not obvious madness. High but rapidly depreciating prices for rare bulbs is a typical pattern in the flower bulb industry. Only the last month of the speculation, during which common bulb prices increased rapidly and crashed, remains as a potential bubble.

We generate an empirical method aimed at predicting the timing and magnitude of devaluations forced by speculative attacks on fixed exchange rate systems. Using the Mexican experience as an example, we produce time-series estimates of the one-period-ahead probability of devaluation, the expected value of the new fixed exchange rate, and the confidence interval of the forecasted exchange rate. The results of the empirical exercise are encouraging. Devaluations, both in and out of sample, did occur when "predicted" by the model. Furthermore, the probabilities of devaluation reached relatively high values prior to actual devaluations.

We generate an empirical method aimed at predicting the timing and magnitude of devaluations forced by speculative attacks on fixed exchange rate systems. Using the Mexican experience as an example, we produce time-series estimates of the one-period-ahead probability of devaluation, the expected value of the new fixed exchange rate, and the confidence interval of the forecasted exchange rate. The results of the empirical exercise are encouraging. Devaluations, both in and out of sample, did occur when "predicted" by the model. Furthermore, the probabilities of devaluation reached relatively high values prior to actual devaluations.

[In this paper we develop a rational expectations exchange-rate model which is capable of confronting explicitly agents' beliefs about a future switch in exogenous driving processes. In our set-up the agents know with certainty both the initial exogenous process and the new process to be adopted when the switch occurs. However, they do not know with certainty the timing of future switch as it depends on the path followed by the (stochastic) exchange rate. The model is discussed in terms of the British return to pre-war parity, in 1925. However, our results are applicable to a variety of situations where process switching depends on the motion of a key endogenous variable.]

The substantial U.S. inflations of the 1970s led to some popular support for commodity-based money. Gold has had a special role in historical commodity-money schemes, and it emerged as a leading contender in recent discussions. In October 1980 Congress established the Gold Commission to study the possible remonetization of gold. In this paper we analyze some gold monetization schemes proposed to the commission. We find that the adoption of these proposals need not lead to the price-level stability their proponents seek. Even a well-designed commodity-money scheme is a foolproof inflation guard only when the scheme's permanence is guaranteed. Permanence may possibly be guaranteed by an underlying political economy that abhors inflation, but merely the enactment of a new ephemeral rule does not ensure permanence.

The substantial U.S. inflations of the 1970s led to some popular support for commodity-based money. Gold has had a special role in historical commodity-money schemes, and it emerged as a leading contender in recent discussions. In October 1980 Congress established the Gold Commission to study the possible remonetization of gold. In this paper we analyze some gold monetization schemes proposed to the commission. We find that the adoption of these proposals need not lead to the price-level stability their proponents seek. Even a well-designed commodity-money scheme is a foolproof inflation guard only when the scheme's permanence is guaranteed. Permanence may possibly be guaranteed by an underlying political economy that abhors inflation, but merely the enactment of a new ephemeral rule does not ensure permanence.