Premodern debasement: a messy affair

Oliver Volckart

Economic History Working Papers from London School of Economics and Political Science, Department of Economic History

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.

Keywords: monetary policies; debasements; monitoring costs; currency markets; late middle ages; early modern period (search for similar items in EconPapers)
JEL-codes: N13 N23 N43 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2017-12
New Economics Papers: this item is included in nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:wpaper:86533

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