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

Listed author(s):
  • Oscar Gelderblom
  • Joost Jonker
Registered author(s):

    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.

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    File URL: http://www.cgeh.nl/sites/default/files/WorkingPapers/cgehwp74_gelderblomjonker.pdf
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    Paper provided by Utrecht University, Centre for Global Economic History in its series Working Papers with number 0074.

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    Length: 30 pages
    Date of creation: Nov 2015
    Handle: RePEc:ucg:wpaper:0074
    Contact details of provider: Postal:
    University of Utrecht, Drift 10, The Netherlands

    Web page: http://www.cgeh.nl

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