GOLD, SILVER, AND THE GLORIOUS-REVOLUTION - ARBITRAGE BETWEEN BILLS OF EXCHANGE AND BULLION

Arbitrage between bullion and bills of exchange transmitted exchange r ate shocks to early modem England's monetary stock. The country's entr y into the Nine Years War following the Glorious Revolution of 1688 we akened the pound's exchange rate which ended a period of gold imports into England and began a period of silver exports. The success of this international arbitrage was built on innovative intermediaries such a s the London goldsmith-banker Stephen Evance. This article shows how h e channelled international bullion hows and arranged for complementary financial services that facilitated arbitrage between bills of exchan ge and bullion.