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The Debasement Puzzle: An Essay on Medieval Monetary History

Quarterly Review 2142 | Fall 1997

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Arthur J. Rolnick Senior Vice President and Director of Research, 1985-2010
Warren E. Weber Retired Economist
The Debasement Puzzle: An Essay on Medieval Monetary History


This study establishes several facts about medieval monetary debasements: they were followed by unusually large minting volumes and by increased seigniorage; old and new coins circulated concurrently; and, at least some of the time, coins were valued by weight. These facts constitute a puzzle because debasements provide no additional inducements to bring coins to the mint. On theoretical and empirical grounds, the authors reject explanations based on by-tale circulation, nominal contracts, and sluggish price adjustment. They conclude that debasements pose a challenge to monetary economics.

This article was originally published in the _Journal of Economic History_ (December 1996, vol. 56, no. 4, pp. 789–808). It is reprinted in the Federal Reserve Bank of Minneapolis Quarterly Review with the permission of Cambridge University Press.