Commodity Money Inflation: Theory and Evidence from France in 1350-1436
Sussman, Nathan and Zeira, Joseph (2002) Commodity Money Inflation: Theory and Evidence from France in 1350-1436. [Discussion Paper]. p. 46. Faculty Research Working Papers Series (No. RWP02-008).
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This paper presents a theory of inflation in commodity money and supports it by evidence from inflationary episodes in France during the fourteenth and fifteenth centuries. The paper shows that commodity money can be inflated similarly to fiat money through repeated debasements, which act like devaluations. Furthermore, as with fiat money, demand for commodity money falls with inflation. Unlike fiat money, at high rates of inflation demand for commodity money becomes insensitive to inflation, since commodity money has intrinsic value in addition to its transactions value. Finally, we show that an anticipated stabilization reduces demand for commodity money, which is opposite to the effect of anticipated standard stabilization on demand for fiat money.
|Item Type:||Report / Paper (Discussion Paper)|
|Research documents and activity classification:||Working Papers > Refereed Working Papers / of international relevance|
|Divisions:||Department of Business and Management|
|Additional Information:||The definitive version of the paper has been published in "Journal of Monetary Economics", Vol. 50(8), Pages 1769-1793, November 2003.|
|Uncontrolled Keywords:||Economics, Macroeconomics.|
|MIUR Scientific Area:||Area 13 - Economics and Statistics > SECS-P/01 Political Economy|
|Deposited By:||Maria Teresa Nistico|
|Deposited On:||21 Dec 2010 16:08|
|Last Modified:||21 Dec 2010 16:09|
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