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Enter the ghost: cashless payments in the Early Modern Low Countries, 1500-1800

Author

Listed:
  • Oscar Gelderblom
  • Joost Jonker

Abstract

We analyze the evolution of payments in the Low Countries during the period 1500-1800 to argue for the historical importance of money of account or ghost money. Aided by the adoption of new bookkeeping practices such as ledgers with current accounts, this convention spread throughout the entire area from the 14th century onwards. Ghost money eliminated most of the problems associated with paying cash by enabling people to settle transactions in a fictional currency accepted by everyone. As a result two functions of money, standard of value and means of settlement, penetrated easily, leaving the third one, store of wealth, to whatever gold and silver coins available. When merchants used ghost money to record credit granted to counterparts, they in effect created a form of money which in modern terms might count as M1. Since this happened on a very large scale, we should reconsider our notions about the volume of money in circulation during the Early Modern Era.

Suggested Citation

  • Oscar Gelderblom & Joost Jonker, 2015. "Enter the ghost: cashless payments in the Early Modern Low Countries, 1500-1800," Working Papers 0074, Utrecht University, Centre for Global Economic History.
  • Handle: RePEc:ucg:wpaper:0074
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    File URL: http://www.cgeh.nl/sites/default/files/WorkingPapers/cgehwp74_gelderblomjonker.pdf
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Coinucopia: Dealing with Multiple Currencies in the Medieval Low Countries
      by bbatiz in NEP-HIS blog on 2016-03-11 20:57:35

    More about this item

    Keywords

    Money; cashless payments; coins and credit; Early Modern Low Countries;

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