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How Amsterdam got fiat money

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  • Stephen Quinn
  • William Roberds

Abstract

We investigate a fiat money system introduced by the Bank of Amsterdam in 1683. Using data from the Amsterdam Municipal Archives, we partially reconstruct changes in the bank's balance sheet from 1666 through 1702. Our calculations show that the Bank of Amsterdam, founded in 1609, was engaged in two archetypal central bank activities—lending and open market operations—both before and after its adoption of a fiat standard. After 1683, the bank was able to conduct more regular and aggressive policy interventions, from a virtually nonexistent capital base. The bank's successful experimentation with a fiat standard foreshadows later developments in the history of central banking.

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Bibliographic Info

Paper provided by Federal Reserve Bank of Atlanta in its series Working Paper with number 2010-17.

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Date of creation: 2010
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Handle: RePEc:fip:fedawp:2010-17

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Fiat money, 1683
    by Economic Logician in Economic Logic on 2011-02-11 15:24:00
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Cited by:
  1. Stephen Quinn & William Roberds, 2012. "The Bank of Amsterdam through the lens of monetary competition," Working Paper 2012-14, Federal Reserve Bank of Atlanta.
  2. Oscar Gelderblom & Joost Jonker, 2013. "Early Capitalism in the Low Countries," Working Papers 0041, Utrecht University, Centre for Global Economic History.
  3. Roberds, William & Velde, Francois R., 2014. "Early Public Banks," Working Paper Series WP-2014-3, Federal Reserve Bank of Chicago.
  4. Stephen Quinn & William Roberds, 2012. "Responding to a shadow banking crisis: the lessons of 1763," Working Paper 2012-08, Federal Reserve Bank of Atlanta.
  5. Anna Kovner & David Skeie, 2013. "Evaluating the quality of fed funds lending estimates produced from Fedwire payments data," Staff Reports 629, Federal Reserve Bank of New York.
  6. Hiroshi Fujiki, 2013. "Japanese Money Demand from the Regional Data: An Update and Some Additional Results," IMES Discussion Paper Series 13-E-04, Institute for Monetary and Economic Studies, Bank of Japan.

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