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Currency Competition in China Between 1850 and 1950 A Case Study on Hayek’s Denationalised Money?


  • David Denzer-Speck

    (Albert-Ludwigs-Universität Freiburg, Lehrstuhl für Finanzwissenschaft und Monetäre Ökonomie, Alte Universität Freiburg, Bertoldstraße 17, D-79098 Freiburg/Br)


In this article, we analyse whether China’s monetary system between 1850 and 1950 can be compared to F. A. von Hayek’s idea of denationalised money. While different currencies existed and competed during the whole period, we find that only the first part, until the beginning of the 20th century can be characterised as a one of denationalised money. We furthermore find evidence that the decentralised supply of competing monies acted as a protection against money induced inflation as it helped to preserve the convertibility of banknotes in precious metal. However, this advantage of currency competition came along with considerable transaction and information costs.

Suggested Citation

  • David Denzer-Speck, 2009. "Currency Competition in China Between 1850 and 1950 A Case Study on Hayek’s Denationalised Money?," Credit and Capital Markets, Credit and Capital Markets, vol. 42(3), pages 327-351.
  • Handle: RePEc:kuk:journl:v:42:y:2009:i:3:p:327-351

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    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East


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