Money doctors and their reform proposals for China reconsidered, 1903–29

Abstract

In this paper we provide a quantitative evaluation of foreign financial advising, taking China’s currency reform proposals as an example. Between 1903 and 1929, three Western financial experts proposed a gold (‐exchange) standard to China, which at that time was on a silver standard. Using counterfactual simulation, we find that: (1) a gold (‐exchange) standard would not have brought price stability to China; (2) and it could have even worsened global deflation during the beginning years of the Great Depression.