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Currency competition in Switzerland


  • Michael D. Bordo



The recent interest by many central banks in digital currency and the role of the central bank in possibly providing them and regulating them as well as the concern over privately issued crypto currencies like bitcoin, has resonance to the monetary history of many advanced countries in the early nineteenth century when multiple competing banks issued notes based on specie coins of varying quality. The currency history of Switzerland in the nineteenth century illustrates the evolution from competing banks of issue to the creation of the Swiss National bank in 1907 with a monopoly of the currency. The public good benefits of as central bank issued currency convinced the early classical economists on the basic role of central banks. Today the upsurge of privately produced crypto currencies with variable nominal and real values makes a case for the creation by central banks of their own digital currencies.

Suggested Citation

  • Michael D. Bordo, 2017. "Currency competition in Switzerland," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 68(01), pages 101-108, December.
  • Handle: RePEc:usg:auswrt:2017:68:01:101-108

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    References listed on IDEAS

    1. Roland Vaubel, 1984. "The Government's Money Monopoly: Externalities or Natural Monopoly?," Kyklos, Wiley Blackwell, vol. 37(1), pages 27-58, February.
    2. Baltensperger,Ernst & Kugler,Peter, 2017. "Swiss Monetary History since the Early 19th Century," Cambridge Books, Cambridge University Press, number 9781107199309, March.
    3. Michael D. Bordo & Andrew T. Levin, 2017. "Central Bank Digital Currency and the Future of Monetary Policy," NBER Working Papers 23711, National Bureau of Economic Research, Inc.
    4. Klein, Benjamin, 1974. "The Competitive Supply of Money," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 6(4), pages 423-453, November.
    5. Rolnick, Arthur J. & Weber, Warren E., 1984. "The causes of free bank failures : A detailed examination," Journal of Monetary Economics, Elsevier, vol. 14(3), pages 267-291, November.
    6. Milton Friedman & Anna J. Schwartz, 1987. "Has Government Any Role in Money?," NBER Chapters, in: Money in Historical Perspective, pages 289-314, National Bureau of Economic Research, Inc.
    7. Rolnick, Arthur J & Weber, Warren E, 1983. "New Evidence on the Free Banking Era," American Economic Review, American Economic Association, vol. 73(5), pages 1080-1091, December.
    8. Gorton, Gary, 1985. "Banking theory and free banking history: A Review Essay," Journal of Monetary Economics, Elsevier, vol. 16(2), pages 267-276, September.
    9. Michael Bordo & Thomas Helbling & Harold James, 2007. "Swiss Exchange Rate Policy in the 1930s. Was the Delay in Devaluation Too High a Price to Pay for Conservatism?," Open Economies Review, Springer, vol. 18(1), pages 1-25, February.
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