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The big problem of small change Author info | Abstract | Publisher info | Download info | Related research | Statistics Thomas J. Sargent
Francois R. Velde
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Western Europe was plagued with currency shortages from the 14th century, at which a 'standard formula' had been devised to cure the problem. We use a cash-in-advance model of commodity money to define a currency shortage, show that they could develop and persist under commodity money regime, and analyze the role played by each ingredient in the standard formula. A companion paper documents the evolution of monetary theory, monetary experiments and minting technology over the course of six hundred years.
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Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series, Macroeconomic Issues with number
WP-97-8.
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Date of creation: 1997Date of revision:
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Keywords: Monetary theory Money Money theory Other versions of this item:
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
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José I. García de Paso, .
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"The 1628 Castilian Crydown: A Test of Competing Theories of the Price Level ,"
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Huberto M. Ennis, 2003.
"Shortages of small change in early Argentina ,"
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03-12, Federal Reserve Bank of Richmond.
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Xavier Cuadras Morató, 2005.
"Circulation of Private Notes during a Currency Shortage ,"
Economics Working Papers
811, Department of Economics and Business, Universitat Pompeu Fabra.
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Manjong Lee & Neil Wallace, 2006.
"Optimal divisibility when money is costly to produce ,"
Review of Economic Dynamics ,
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[Downloadable!] (restricted)
Carlos Álvarez, 2003.
"Spanish Monarchy´S Monetary Problems In The Seventeenth Century: Small Change And Foreign Credit ,"
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[Downloadable!]
Francois R. Velde, 1998.
"Lessons from the history of money ,"
Economic Perspectives ,
Federal Reserve Bank of Chicago, issue Q I, pages 2-16.
[Downloadable!]
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