Monetary Instability, Lack of Integration, and the Curse of a Commodity Money Standard. The German Lands, c.1400–1900 A. D.

Abstract

Abstract/Zusammenfassung Currency debasement, defined as a loss of precious metal content (intrinsic value) of the circulating penny currencies over time, was a common feature in the monetary history of Europe, c. 1400–1900. Over the centuries the loss rate was sustained; between 1400 and 1900 A. D. the (south) German penny currencies lost close to 90 per cent of their intrinsic value. As prior to the twentieth century all circulating means of exchange derived their purchasing power from the value of the precious metal contained in them these debasements reflect considerable fluctuations in these coins’ exchange value. Whilst some of the possible origins of this have been addressed by previous research, comprehensive models are missing, and the social and economic consequences of this phenomenon have only seldom been studied. The present paper contributes to the debate, using long-run data on the circulating small change currencies in the German lands, c.1400–1900. After an introduction (I.) the second se...