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Premodern debasement: a messy affair

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  • Volckart, Oliver

Abstract

The paper argues that in premodern Europe, the practice of debasement was far more ‘messy’ than research has generally recognised. First, high information costs often prevented the effective control of mint officials who could exploit their resulting autonomy in order to debase coins on their own account. Second, these costs made it impossible to monitor markets closely enough to enforce regulations. Attempts by governments to debase coins by increasing their nominal value therefore ‘worked’ only if they conformed to the market rates of these coins. Finally, high information costs prevented the creation of closed areas where the domestic currency enjoyed a monopoly. The resulting trade in coinage created incentives for governments to issue inferior copies of their neighbour’s coins – a practice that had the same consequences as a debasement – and forced the affected governments to follow suit by debasing their own coinage, too.

Suggested Citation

  • Volckart, Oliver, 2017. "Premodern debasement: a messy affair," Economic History Working Papers 86533, London School of Economics and Political Science, Department of Economic History.
  • Handle: RePEc:ehl:wpaper:86533
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    File URL: http://eprints.lse.ac.uk/86533/
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    References listed on IDEAS

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    1. Chilosi, David & Volckart, Oliver, 2011. "Money, States, and Empire: Financial Integration and Institutional Change in Central Europe, 1400–1520," The Journal of Economic History, Cambridge University Press, vol. 71(03), pages 762-791, September.
    2. Chilosi, David & Volckart, Oliver, 2010. "Good or bad money?: debasement, society and the state in the late Middle Ages," Economic History Working Papers 27946, London School of Economics and Political Science, Department of Economic History.
    3. Arthur J. Rolnick & Francois R. Velde & Warren E. Weber, 1997. "The debasement puzzle: an essay on medieval monetary history," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall, pages 8-20.
    4. repec:bla:ehsrev:v:70:y:2017:i:3:p:758-778 is not listed on IDEAS
    5. 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.
    6. Michael Prestwich, 1979. "Early Fourteenth-Century Exchange Rates," Economic History Review, Economic History Society, vol. 32(4), pages 470-482, November.
    7. Glassman, Debra & Redish, Angela, 1985. "New Estimates of the Money Stock in France, 1493–1680," The Journal of Economic History, Cambridge University Press, vol. 45(01), pages 31-46, March.
    8. Van Zanden, Jan Luiten & Prak, Maarten, 2006. "Towards an economic interpretation of citizenship: The Dutch Republic between medieval communes and modern nation-states," European Review of Economic History, Cambridge University Press, vol. 10(02), pages 111-145, August.
    9. Sussman, Nathan, 1993. "Debasements, Royal Revenues, and Inflation in France During the Hundred Years' War, 1415–1422," The Journal of Economic History, Cambridge University Press, vol. 53(01), pages 44-70, March.
    10. John H. Munro, 2012. "The Technology and Economics of Coinage Debasements in Medieval and Early Modern Europe: with special reference to the Low Countries and England," Working Papers tecipa-456, University of Toronto, Department of Economics.
    11. Buringh, Eltjo & Van Zanden, Jan Luiten, 2009. "Charting the “Rise of the West”: Manuscripts and Printed Books in Europe, A Long-Term Perspective from the Sixth through Eighteenth Centuries," The Journal of Economic History, Cambridge University Press, vol. 69(02), pages 409-445, June.
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    More about this item

    Keywords

    monetary policies; debasements; monitoring costs; currency markets; late middle ages; early modern period;

    JEL classification:

    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913

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