Exchange rate commitments implied in the silver standard originally anchored China's monetary policy and the inflation rate in the early republican period. It was believed that China's free silver standard acted as a natural check on the excessive issuing of notes by warlords and local governments. This consensus view, however, overlooks the fact that the silver standard was inherently unstable because it left no room for monetary policy to stabilize output and inflation. This article employs a formal structural model to show that a fiat currency unlinked to fluctuations in the price of silver that allows government to implement self-adjusting monetary policies would further stabilize China's output and inflation.

The Southern Economic Journal features original, refereed scholarly articles in all areas of economics as well as contributions on the pedagogy of economics. The journal also contains occasional invited papers such as the Distinguished Guest Lecture, and the Presidential Address from the annual conference of the Southern Economic Association (SEA). In addition, the journal serves members of SEA and other readers interested in economics through the publication of book reviews, and announcements. The Southern Economic Journal has been published quarterly by the Southern Economic Association since its inception in 1933, and currently contains approximately 1,000 printed pages per year.

The Southern Economic Association (SEA) was founded in 1927 to further the education of scholars and the public in economic affairs. Toward this end, the organization seeks to stimulate interest in and disseminate results of recent research in theory, policy making, business practices, and regulation. Currently, SEA has approximately 1,000 members worldwide, and more than 1,000 additional institutional subscribers to the journal. The Association holds its annual conference meetings in November, and publishes quarterly the Southern Economic Journal.