Rules, Discretion or Reputation? Monetary Policies and the Efficiency of Financial Markets in Germany, 14th to 16th Centuries
This paper examines the questions of whether and how feudal rulers were able to credibly commit to preserving monetary stability, and of which consequences their decisions had for the efficiency of financial markets. The study reveals that princes were usually only able to commit to issuing a stable coinage in gold, but not in silver. As for silver currencies, the hypothesis is that transferring the right of coinage to an autonomous city was the functional equivalent to establishing an independent central bank. An analysis of market performance indicates that financial markets between cities that were autonomous with regard to their monetary policies were significantly better integrated and more efficient than markets between cities whose currencies were supplied by a feudal ruler.
|Date of creation:||Feb 2007|
|Contact details of provider:|| Postal: Spandauer Str. 1,10178 Berlin|
Web page: http://sfb649.wiwi.hu-berlin.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kreps, David M. & Milgrom, Paul & Roberts, John & Wilson, Robert, 1982.
"Rational cooperation in the finitely repeated prisoners' dilemma,"
Journal of Economic Theory,
Elsevier, vol. 27(2), pages 245-252, August.
- David Kreps & Paul Milgrom & John Roberts & Bob Wilson, 2010. "Rational Cooperation in the Finitely Repeated Prisoners' Dilemma," Levine's Working Paper Archive 239, David K. Levine.
- Barro, Robert J. & Gordon, David B., 1983. "Rules, discretion and reputation in a model of monetary policy," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 101-121.
- Robert J. Barro & David B. Gordon, 1983. "Rules, Discretion and Reputation in a Model of Monetary Policy," NBER Working Papers 1079, National Bureau of Economic Research, Inc.
- Wolf, Nikolaus & Ritschl, Albrecht, 2003. "Endogeneity of Currency Areas and Trade Blocs: Evidence from the Inter-War Period," Papers 2004,10, Humboldt University of Berlin, Center for Applied Statistics and Economics (CASE).
- Ritschl, Albrecht & Wolf, Nikolaus, 2003. "Endogeneity of Currency Areas and Trade Blocs: Evidence from the Inter-war Period," CEPR Discussion Papers 4112, C.E.P.R. Discussion Papers.
- Volckart, Oliver & Wolf, Nikolaus, 2006. "Estimating Financial Integration in the Middle Ages: What Can We Learn from a TAR Model?," The Journal of Economic History, Cambridge University Press, vol. 66(01), pages 122-139, March.
- N. J. Mayhew, 1974. "Numismatic Evidence and Falling Prices in the Fourteenth Century," Economic History Review, Economic History Society, vol. 27(1), pages 1-15, 02.
- Wolfgang Kasper & Manfred E. Streit, 1999. "Institutional Economics," Books, Edward Elgar Publishing, number 1582.
- North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 803-832, December.
- 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.
- Rolnick, Arthur J. & Velde, François R. & Weber, Warren E., 1996. "The Debasement Puzzle: An Essay on Medieval Monetary History," The Journal of Economic History, Cambridge University Press, vol. 56(04), pages 789-808, December.
- Klein, Benjamin, 1974. "The Competitive Supply of Money," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 6(4), pages 423-453, November.
- 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.
- Sussman, Nathan & Zeira, Joseph, 2002. "Commodity Money Inflation: Theory and Evidence from France in 1350-1436," Working Paper Series rwp02-008, Harvard University, John F. Kennedy School of Government.
- Neal, Larry, 1987. "The Integration and Efficiency of the London and Amsterdam Stock Markets in the Eighteenth Century," The Journal of Economic History, Cambridge University Press, vol. 47(01), pages 97-115, March.
- Kydland, Finn E. & Prescott, Edward C., 1980. "Dynamic optimal taxation, rational expectations and optimal control," Journal of Economic Dynamics and Control, Elsevier, vol. 2(1), pages 79-91, May.
- Oliver Volckart, 2006. "The Influence of Information Costs on the Integration of Financial Markets: Northern Europe, 1350-1560," SFB 649 Discussion Papers SFB649DP2006-049, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
- Munro, John H., 2000. "The 'New Institutional Economics' and the Changing Fortunes of Fairs in Medieval and Early Modern Europe: the Textile Trades, Warfare, and Transaction Costs," MPRA Paper 11029, University Library of Munich, Germany, revised Feb 2001.
- Peter N. Ireland, 2002. ""Rules Rather Than Discretion" After Twenty Five Years: What Have We Learned? What More Can We Learn?," Boston College Working Papers in Economics 530, Boston College Department of Economics.
- Sussman, Nathan, 1998. "The Late Medieval Bullion Famine Reconsidered," The Journal of Economic History, Cambridge University Press, vol. 58(01), pages 126-154, March.
- Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:hum:wpaper:sfb649dp2007-007. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RDC-Team)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.