Bimetallism has been the subject of considerable debate: Was it a viable monetary
system? Was it a desirable system? In our model, the (exogenous and stochastic)
amount of each metal can be split between monetary uses to satisfy a cash-in-advance
constraint, and nonmonetary uses in which the stock of uncoined metal yields utility.
The ratio of the monies in the cash-in-advance constraint is endogenous. Bimetallism
is feasible: we nd a continuum of steady states (in the certainty case) indexed by
the constant exchange rate of the monies; we also prove existence for a range of xed
exchange rates in the stochastic version. Bimetallism does not appear desirable on
a welfare basis: among steady states, we prove that welfare under monometallism is
higher than under any bimetallic equilibrium. We compute welfare and the variance
of the price level under a variety of regimes (bimetallism, monometallism with and
without trade money) and nd that bimetallism can signi cantly stabilize the price
level, depending on the covariance between the shocks to the supplies of metals.