The big problem of small change
Abstract: Western Europe was plagued with currency shortages from the 14th century, at which a 'standard formula' had been devised to cure the problem. We use a cash-in-advance model of commodity money to define a currency shortage, show that they could develop and persist under commodity money regime, and analyze the role played by each ingredient in the standard formula. A companion paper documents the evolution of monetary theory, monetary experiments and minting technology over the course of six hundred years.
File(s): File format is application/pdf http://www.chicagofed.org/digital_assets/publications/working_papers/1997/wp97_8.pdf
Provider: Federal Reserve Bank of Chicago
Part of Series: Working Paper Series, Macroeconomic Issues
Publication Date: 1997