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How successful was Germany's first common currency? A new look at the imperial monetary union of 1559

Volckart, Oliver (2022) How successful was Germany's first common currency? A new look at the imperial monetary union of 1559. Economic History Working Papers (338). London School of Economics and Political Science, London, UK.

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The paper starts out from the insight that success or failure of the common currency, on which the diet of the Holy Roman Empire agreed in 1559, cannot be assessed against how modern currencies are functioning. Rather, the benchmark is provided by historical criteria, primarily by the aims of the political authorities that joined the union. The analysis finds that there were two overriding aims: 1) preventing high-ranking economic agents from exploiting their social standing in order to push up prices and rents, and 2) removing the conditions that allowed Gresham’s Law to undermine monetary stability. The participants in the union tried to reach the first aim by retaining regional small change in addition to the Empire-wide larger units. While there is limited evidence for the common currency preventing the functioning of Gresham’s Law within the Empire up to the immediate run-up to the Thirty Years War (1618-48), it failed to prevent inflation and the inflow of foreign coinage. However, in neither respect the post1559 Empire differed from other contemporary polities. On balance, therefore, the Empire’s common currency can be considered a success.

Item Type: Monograph (Working Paper)
Official URL:
Additional Information: © 2022 The Author
Divisions: Economic History
Subjects: H Social Sciences > HC Economic History and Conditions
D History General and Old World > DD Germany
D History General and Old World > D History (General) > D204 Modern History
JEL classification: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy (Targets, Instruments, and Effects)
N - Economic History > N1 - Macroeconomics and Monetary Economics; Growth and Fluctuations > N13 - Europe: Pre-1913
Date Deposited: 29 Apr 2022 11:06
Last Modified: 16 May 2024 12:24

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