How Amsterdam got fiat money

Stephen Quinn and William Roberds

Journal of Monetary Economics, 2014, vol. 66, issue C, 1-12

Abstract: A fiat money system was introduced in the seventeenth century by a prominent public bank of the time, the Bank of Amsterdam. Employing data from the bank׳s archives, we show that bank money became a more attractive transactions medium following a 1683 policy change, which unbundled the bank׳s account balances from a right to redeem these balances in coin. Balances not matched by a redemption right became fiat. This change also stabilized the value of bank money as a unit of account, freed the bank from defensive open market operations, and promoted seigniorage collection.

Keywords: Bank of Amsterdam; Fiat money; Commodity money; Monetary policy; Credit policy (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (18)

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Working Paper: How Amsterdam got fiat money (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:66:y:2014:i:c:p:1-12

DOI: 10.1016/j.jmoneco.2014.03.004

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