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Premodern debasement: a messy affair

Volckart, Oliver (2017) Premodern debasement: a messy affair. Economic History working papers (270/2017). London School of Economics and Political Science, London, UK.

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Abstract

The paper argues that in premodern Europe, the practice of debasement was far more ‘messy’ than research has generally recognised. First, high information costs often prevented the effective control of mint officials who could exploit their resulting autonomy in order to debase coins on their own account. Second, these costs made it impossible to monitor markets closely enough to enforce regulations. Attempts by governments to debase coins by increasing their nominal value therefore ‘worked’ only if they conformed to the market rates of these coins. Finally, high information costs prevented the creation of closed areas where the domestic currency enjoyed a monopoly. The resulting trade in coinage created incentives for governments to issue inferior copies of their neighbour’s coins – a practice that had the same consequences as a debasement – and forced the affected governments to follow suit by debasing their own coinage, too.

Item Type: Monograph (Working Paper)
Official URL: http://www.lse.ac.uk/Economic-History
Additional Information: © 2017 The Authors
Divisions: Economic History
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
JEL classification: N - Economic History > N1 - Macroeconomics and Monetary Economics; Growth and Fluctuations > N13 - Europe: Pre-1913
N - Economic History > N2 - Financial Markets and Institutions > N23 - Europe: Pre-1913
N - Economic History > N4 - Government, War, Law, and Regulation > N43 - Europe: Pre-1913
Sets: Departments > Economic History
Collections > Economists Online
Date Deposited: 24 Jan 2018 15:47
Last Modified: 14 Jul 2019 00:23
URI: http://eprints.lse.ac.uk/id/eprint/86533

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