The Latin Monetary Union and Trade: A Closer Look
Abstract
This paper reexamines the effects of the Latin Monetary Union (LMU) - a 19th century agreement among several European countries to standardize their currencies through a bimetallic system based on fixed gold and silver content - on trade. Unlike previous studies, this paper adopts the latest advances in gravity modeling and a more rigorous approach to defining the control group by accounting for the diversity of currency regimes during the early years of the LMU. My findings suggest that the LMU had a positive effect on trade between its members until the early 1870s, when bimetallism was still considered a viable monetary system. These effects then faded, converging to zero. Results are robust to the inclusion of additional potential confounders, the use of various samples spanning different countries and trade data sources, and alternative methodological choices.
Cite
@article{arxiv.2510.25487,
title = {The Latin Monetary Union and Trade: A Closer Look},
author = {Jacopo Timini},
journal= {arXiv preprint arXiv:2510.25487},
year = {2026}
}