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The debasement puzzle: an essay on medieval monetary history

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Author Info

  • Arthur J. Rolnick
  • Francois R. Velde
  • Warren E. Weber

Abstract

This study establishes several facts about medieval monetary debasements: they were followed by unusually large minting volumes and by increased seigniorage; old and new coins circulated concurrently; and, at least some of the time, coins were valued by weight. These facts constitute a puzzle because debasements provide no additional inducements to bring coins to the mint. On theoretical and empirical grounds, the authors reject explanations based on by-tale circulation, nominal contracts, and sluggish price adjustment. They conclude that debasements pose a challenge to monetary economics. This article was originally published in the Journal of Economic History (December 1996, vol. 56, no. 4, pp. 789--808). It is reprinted in the Federal Reserve Bank of Minneapolis Quarterly Review with the permission of Cambridge University Press.

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Bibliographic Info

Article provided by Federal Reserve Bank of Minneapolis in its journal Quarterly Review.

Volume (Year): (1997)
Issue (Month): Fall ()
Pages: 8-20

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Handle: RePEc:fip:fedmqr:y:1997:i:fall:p:8-20:n:v.21no.4

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Keywords: Money;

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References

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  1. N. J. Mayhew, 1974. "Numismatic Evidence and Falling Prices in the Fourteenth Century," Economic History Review, Economic History Society, vol. 27(1), pages 1-15, 02.
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Citations

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Cited by:
  1. Francois R. Velde & Warren E. Weber & Randall Wright, 1997. "A model of commodity money, with applications to Gresham's law and the debasement puzzle," Staff Report 215, Federal Reserve Bank of Minneapolis.
  2. Luciano Pezzolo, 2006. "The rise and decline of a great power: Venice 1250-1650," Working Papers 2006_27, Department of Economics, University of Venice "Ca' Foscari".
  3. Manjong Lee & Neil Wallace, 2006. "Optimal divisibility when money is costly to produce," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(3), pages 541-556, July.
  4. Stephen Quinn & William Roberds, 2005. "The big problem of large bills: the Bank of Amsterdam and the origins of central banking," Working Paper 2005-16, Federal Reserve Bank of Atlanta.
  5. Gerald P. Dwyer, Jr. & James R. Lothian, 2002. "International money and common currencies in historical perspective," Working Paper 2002-7, Federal Reserve Bank of Atlanta.
  6. Oliver Volckart, 2008. "‘The big problem of the petty coins’, and how it could be solved in the late Middle Ages," Economic History Working Papers 22310, London School of Economics and Political Science, Department of Economic History.
  7. Sussman, Nathan & Zeira, Joseph, 2003. "Commodity money inflation: theory and evidence from France in 1350-1436," Journal of Monetary Economics, Elsevier, vol. 50(8), pages 1769-1793, November.
  8. Young Sik Kim & Manjong Lee, 2011. "Unit of Account, Medium of Exchange, and Prices," Discussion Paper Series 1104, Institute of Economic Research, Korea University.
  9. John H. Munro, 2009. "Coinage and Monetary Policies in Burgundian Flanders during the late-medieval 'Bullion Famines',. 1384 - 1482," Working Papers tecipa-361, University of Toronto, Department of Economics.
  10. Oliver Volckart, 2007. "Rules, Discretion or Reputation? Monetary Policies and the Efficiency of Financial Markets in Germany, 14th to 16th Centuries," SFB 649 Discussion Papers SFB649DP2007-007, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  11. Gerald P. Dwyer Jr. & James R. Lothian, 2003. "The Economics of International Monies," International Finance 0311010, EconWPA.

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