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Coinage, debasements, and Gresham's laws

Author

Listed:
  • Bruce D. Smith

    (Economics Department, University of Texas, Austin, TX 78712-1173, USA)

  • Thomas J. Sargent

    (Hoover Institution, Stanford, CA 94305-6010, and University of Chicago, Chicago, IL 60637, USA)

Abstract

This paper formulates a model of commodity money that circulates by tale, and applies it to a variety of situations, some of which seem to confirm, and others to contradict, `Gresham's Law'. We analyze how debasements could prompt decisions of citizens voluntarily to participate in recoinages that subjected them to seigniorage taxes.

Suggested Citation

  • Bruce D. Smith & Thomas J. Sargent, 1997. "Coinage, debasements, and Gresham's laws," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 10(2), pages 197-226.
    • Handle: RePEc:spr:joecth:v:10:y:1997:i:2:p:197-226
    Note: Received: December 19, 1994; revised version August 1, 1996
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    Citations

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    Cited by:

    1. Rolnick, Arthur J. & Weber, Warren E., 2003. "Review of Thomas J. Sargent and Francois R. Velde, The Big Problem of Small Change," Journal of Political Economy, University of Chicago Press, vol. 111(2), pages 459-488, April.
    2. Li, Yiting, 2002. "Government transaction policy and Gresham's law," Journal of Monetary Economics, Elsevier, vol. 49(2), pages 435-453, March.
    3. François R. Velde & Warren E. Weber & Randall Wright, 1999. "A Model of Commodity Money, with Applications to Gresham's Law and the Debasement Puzzle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(1), pages 291-323, January.
    4. Quinn, Stephen & Roberds, William, 2014. "How Amsterdam got fiat money," Journal of Monetary Economics, Elsevier, vol. 66(C), pages 1-12.
    5. John H. Munro, 2009. "Coinage and Monetary Policies in Burgundian Flanders during the late-medieval 'Bullion Famines',. 1384 - 1482," Working Papers tecipa-361, University of Toronto, Department of Economics.
    6. Svensson, Roger & Westermark, Andreas, 2015. "Renovatio Monetae: Gesell Taxes in Practice," Working Paper Series 1083, Research Institute of Industrial Economics.
    7. Jin, Gu & Zhu, Tao, 2019. "Debasements and Small Coins: An Untold Story of Commodity Money," MPRA Paper 93057, University Library of Munich, Germany.
    8. Burdett, Kenneth & Trejos, Alberto & Wright, Randall, 2001. "Cigarette Money," Journal of Economic Theory, Elsevier, vol. 99(1-2), pages 117-142, July.
    9. Smith, Bruce D., 2001. "Introduction to Monetary and Financial Arrangements," Journal of Economic Theory, Elsevier, vol. 99(1-2), pages 1-21, July.
    10. 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.
    11. 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.
    12. Paal, Beatrix, 2001. "Dynamic Consequences of Stabilization Policies Based on a Return to a Gold Standard," Journal of Economic Theory, Elsevier, vol. 99(1-2), pages 143-186, July.

    More about this item

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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