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The utility of a common coinage: Currency unions and the integration of money markets in late Medieval Central Europe

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  • Boerner, Lars
  • Volckart, Oliver

Abstract

This paper employs a new method and dataset to estimate the effect of currency unions on the integration of financial markets in late Medieval Central Europe. The analysis reveals that membership in a union was significantly correlated with well-integrated markets. We also examine whether currency unions were endogenous. Our results indicate that where unions were established, markets had been significantly better integrated already in the preceding period. In addition, we show that currency unions created by autonomous merchant towns were better integrated than unions implemented by territorial rulers. The overall implication is that monetary diversity was a corollary of weakly integrated markets in late Medieval Central Europe.

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  • Boerner, Lars & Volckart, Oliver, 2011. "The utility of a common coinage: Currency unions and the integration of money markets in late Medieval Central Europe," Explorations in Economic History, Elsevier, vol. 48(1), pages 53-65, January.
    • Handle: RePEc:eee:exehis:v:48:y:2011:i:1:p:53-65
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    2. Du, Shuaishuai & He, Shijun & Huang, Guitian & Kong, Dongmin, 2024. "Financial development and money market integration in Qing China, 1800–1911," Finance Research Letters, Elsevier, vol. 63(C).
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    4. Börner, Lars & Severgnini, Battista, 2011. "Epidemic trade," Discussion Papers 2011/12, Free University Berlin, School of Business & Economics.
    5. repec:ehl:wpaper:109885 is not listed on IDEAS
    6. Volckart, Oliver, 2015. "Power politics and princely debts: why Germany’s common currency failed, 1549-1556," LSE Research Online Documents on Economics 64496, London School of Economics and Political Science, LSE Library.
    7. repec:ehl:wpaper:115007 is not listed on IDEAS
    8. Volckart, Oliver, 2022. "How successful was Germany's first common currency? A new look at the imperial monetary union of 1559," LSE Research Online Documents on Economics 115007, London School of Economics and Political Science, LSE Library.
    9. Victoria Gierok, 2023. "The Thirty Years’ War and the Decline of Urban Germany," Oxford Economic and Social History Working Papers _210, University of Oxford, Department of Economics.
    10. Adrian R. Bell & Chris Brooks & Tony K. Moore, 2017. "Did Purchasing Power Parity Hold in Medieval Europe?," Manchester School, University of Manchester, vol. 85(6), pages 682-709, December.
    11. Alexander Fink, 2012. "The Hanseatic League and the Concept of Functional Overlapping Competing Jurisdictions," Kyklos, Wiley Blackwell, vol. 65(2), pages 194-217, May.
    12. Volckart, Oliver, 2018. "The dear old holy Roman realm. How does it hold together? Monetary policies, cross-cutting cleavages and political cohesion in the age of reformation," Economic History Working Papers 90503, London School of Economics and Political Science, Department of Economic History.

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    JEL classification:

    • N0 - Economic History - - General
    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance

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