A new world order: explaining the international diffusion of the gold standard, 1870-1913

The gold standard gradually became an international monetary regime after 1870. Similarly, some nations in the European Union are waiting to adopt the euro while others have joined immediately. What explains the timing of exchange rate regime adoption? To find out, the international diffusion of the gold standard is analyzed. Duration analysis shows that network externalities operating through trade channels, the desire to decrease borrowing costs on international capital markets, and the level of development matter. Some evidence shows that the level of exchange rate volatility or inflationist agricultural interests did not matter for the timing of adoption.