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An economic explanation of the early Bank of Amsterdam, debasement, bills of exchange, and the emergence of the first central bank


  • Stephen F. Quinn
  • William Roberds


The Bank of Amsterdam, founded in 1609, was the first public bank to offer accounts not directly convertible to coin. As such, it can be described as the first true central bank. The debut of central bank money did not result from any conscious policy decision, however, but instead arose almost by accident, in response to the chaotic monetary conditions during the early years of the Dutch Republic. This paper examines the history of this momentous development from the perspective of modern monetary theory.

Suggested Citation

  • Stephen F. Quinn & William Roberds, 2006. "An economic explanation of the early Bank of Amsterdam, debasement, bills of exchange, and the emergence of the first central bank," FRB Atlanta Working Paper 2006-13, Federal Reserve Bank of Atlanta.
  • Handle: RePEc:fip:fedawp:2006-13

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    References listed on IDEAS

    1. Stephen F. Quinn & William Roberds, 2005. "The big problem of large bills: the Bank of Amsterdam and the origins of central banking," FRB Atlanta Working Paper 2005-16, Federal Reserve Bank of Atlanta.
    2. Sargent, Thomas J & Velde, Francois R, 1999. "The Big Problem of Small Change," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(2), pages 137-161, May.
    3. Sussman, Nathan & Zeira, Joseph, 2003. "Commodity money inflation: theory and evidence from France in 1350-1436," Journal of Monetary Economics, Elsevier, vol. 50(8), pages 1769-1793, November.
    4. Redish, Angela, 1990. "The Evolution of the Gold Standard in England," The Journal of Economic History, Cambridge University Press, vol. 50(04), pages 789-805, December.
    5. Neal, Larry, 2000. "How it all began: the monetary and financial architecture of Europe during the first global capital markets, 1648 1815," Financial History Review, Cambridge University Press, vol. 7(02), pages 117-140, October.
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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Quinn S. and Roberds W. (2006) When financial innovation's good for the economy
      by Ben in Economic History Blog on 2009-08-19 00:37:00


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    Cited by:

    1. Calomiris, Charles W. & Flandreau, Marc & Laeven, Luc, 2016. "Political foundations of the lender of last resort: A global historical narrative," Journal of Financial Intermediation, Elsevier, vol. 28(C), pages 48-65.
    2. Quinn, Stephen & Roberds, William, 2014. "How Amsterdam got fiat money," Journal of Monetary Economics, Elsevier, vol. 66(C), pages 1-12.
    3. Stephen F. Quinn & William Roberds, 2012. "The Bank of Amsterdam through the lens of monetary competition," FRB Atlanta Working Paper 2012-14, Federal Reserve Bank of Atlanta.
    4. Roberds, William & Velde, Francois R., 2014. "Early Public Banks," FRB Atlanta Working Paper 2014-9, Federal Reserve Bank of Atlanta.
    5. Börner, Lars & Hatfield, John William, 2010. "The economics of debt clearing mechanisms," Discussion Papers 2010/27, Free University Berlin, School of Business & Economics.
    6. William Roberds, 2016. "Review of Making Money: Coin, Currency, and the Coming of Capitalism by Christine Desan," Journal of Economic Literature, American Economic Association, vol. 54(3), pages 906-921, September.
    7. Kahn, Charles M. & Roberds, William, 2009. "Why pay? An introduction to payments economics," Journal of Financial Intermediation, Elsevier, vol. 18(1), pages 1-23, January.
    8. Nogues-Marco, Pilar, 2013. "Competing Bimetallic Ratios: Amsterdam, London, and Bullion Arbitrage in Mid-Eighteenth Century," The Journal of Economic History, Cambridge University Press, vol. 73(02), pages 445-476, June.
    9. Norman, Ben & Shaw, Rachel & Speight, George, 2011. "The history of interbank settlement arrangements: exploring central banks’ role in the payment system," Bank of England working papers 412, Bank of England.

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