Where was the Global Price of Silver Established? Evidence from London and New York (1878-1953)

Abstract

This paper utilises a newly compiled, unique data set of silver prices for the London and New York markets, as well as the monthly Dollar-Sterling exchange rate from 1878 and 1953 to investigate the source and flows of information and price discovery. Results indicate that London was the dominant market and pricing leader of silver throughout the period analysed. Further evidence suggests that there existed dynamic information flows both within years and decades. These phenomena can be explained due to the use of silver for agricultural market payments and international silver production flows respectively.