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How Amsterdam got fiat money

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  • Stephen F. Quinn
  • William Roberds

Abstract

We investigate a fiat money system introduced by the Bank of Amsterdam in 1683. Using data from the Amsterdam Municipal Archives, we partially reconstruct changes in the bank's balance sheet from 1666 through 1702. Our calculations show that the Bank of Amsterdam, founded in 1609, was engaged in two archetypal central bank activities?lending and open market operations?both before and after its adoption of a fiat standard. After 1683, the bank was able to conduct more regular and aggressive policy interventions, from a virtually nonexistent capital base. The bank's successful experimentation with a fiat standard foreshadows later developments in the history of central banking.

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  • Stephen F. Quinn & William Roberds, 2010. "How Amsterdam got fiat money," FRB Atlanta Working Paper 2010-17, Federal Reserve Bank of Atlanta.
    • Handle: RePEc:fip:fedawp:2010-17
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    File URL: http://www.frbatlanta.org/documents/pubs/wp/wp1017.pdf
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    1. Fiat money, 1683
      by Economic Logician in Economic Logic on 2011-02-11 21:24:00

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    Cited by:

    1. Stephen Quinn & William Roberds, 2015. "Responding to a Shadow Banking Crisis: The Lessons of 1763," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 47(6), pages 1149-1176, September.
    2. Patrick K O'Brien & Nuno Palma, 2020. "Danger to the Old Lady of Threadneedle Street? The Bank Restriction Act and the regime shift to paper money, 1797–1821," European Review of Economic History, European Historical Economics Society, vol. 24(2), pages 390-426.
    3. Hiroshi Fujiki, 2014. "Japanese Money Demand from the Regional Data: An Update and Some Additional Results," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 32, pages 45-102, November.
    4. Stephen Quinn & William Roberds, 2016. "Death of a Reserve Currency," International Journal of Central Banking, International Journal of Central Banking, vol. 12(4), pages 63-103, December.
    5. Donaldson, Jason Roderick & Piacentino, Giorgia & Thakor, Anjan, 2018. "Warehouse banking," Journal of Financial Economics, Elsevier, vol. 129(2), pages 250-267.
    6. 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.
    7. repec:fip:a00001:87606 is not listed on IDEAS
    8. Michael D. Bordo & William Roberds, 2022. "Central Bank Digital Currencies, an Old Tale With a New Chapter," NBER Working Papers 30709, National Bureau of Economic Research, Inc.
    9. Morten Linnemann Bech & Rodney Garratt, 2017. "Central bank cryptocurrencies," BIS Quarterly Review, Bank for International Settlements, September.
    10. Stephen Quinn & William Roberds, 2014. "The Bank of Amsterdam Through the Lens of Monetary Competition," Financial and Monetary Policy Studies, in: Peter Bernholz & Roland Vaubel (ed.), Explaining Monetary and Financial Innovation, edition 127, pages 283-300, Springer.
    11. William Roberds & Francois R. Velde, 2014. "Early Public Banks," FRB Atlanta Working Paper 2014-9, Federal Reserve Bank of Atlanta.
    12. Wilko Bolt & Vera Lubbersen & Peter Wierts, 2022. "Getting the balance right: Crypto, stablecoin and CBDC," Working Papers 736, DNB.
    13. Anna Kovner & David R. Skeie, 2013. "Evaluating the quality of fed funds lending estimates produced from Fedwire payments data," Staff Reports 629, Federal Reserve Bank of New York.
    14. Oscar Gelderblom & Joost Jonker, 2013. "Early Capitalism in the Low Countries," Working Papers 0041, Utrecht University, Centre for Global Economic History.
    15. Stephen F. Quinn & William Roberds, 2017. "An Early Experiment with \"Permazero\"," FRB Atlanta Working Paper 2017-5, Federal Reserve Bank of Atlanta.
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    17. Isabel Schnabel & Hyun Song Shin, 2018. "Money and trust: lessons from the 1620s for money in the digital age," BIS Working Papers 698, Bank for International Settlements.
    18. Katrin Assenmacher & Signe Krogstrup, 2018. "Monetary Policy with Negative Interest Rates: Decoupling Cash from Electronic Money," IMF Working Papers 2018/191, International Monetary Fund.

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