Enter the ghost: cashless payments in the Early Modern Low Countries, 1500-1800

Oscar Gelderblom and Joost Jonker

No 74, Working Papers from Utrecht University, Centre for Global Economic History

Abstract: We analyze the evolution of payments in the Low Countries during the period 1500-1800 to argue for the historical importance of money of account or ghost money. Aided by the adoption of new bookkeeping practices such as ledgers with current accounts, this convention spread throughout the entire area from the 14th century onwards. Ghost money eliminated most of the problems associated with paying cash by enabling people to settle transactions in a fictional currency accepted by everyone. As a result two functions of money, standard of value and means of settlement, penetrated easily, leaving the third one, store of wealth, to whatever gold and silver coins available. When merchants used ghost money to record credit granted to counterparts, they in effect created a form of money which in modern terms might count as M1. Since this happened on a very large scale, we should reconsider our notions about the volume of money in circulation during the Early Modern Era.

Keywords: Money; cashless payments; coins and credit; Early Modern Low Countries (search for similar items in EconPapers)
Pages: 30 pages
Date: 2015-11
New Economics Papers: this item is included in nep-his, nep-hpe and nep-mon
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.cgeh.nl/sites/default/files/WorkingPape ... gelderblomjonker.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucg:wpaper:0074

Access Statistics for this paper

More papers in Working Papers from Utrecht University, Centre for Global Economic History University of Utrecht, Drift 10, The Netherlands. Contact information at EDIRC.
Bibliographic data for series maintained by Sarah Carmichael ().