Quarterly Review 2142

The Debasement Puzzle: An Essay on Medieval Monetary History

Arthur J. Rolnick - Senior Vice President and Director of Research, 1985-2010
Warren E. Weber - Retired Economist
François R. Velde

Fall 1997

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.

Reprinted From: Journal of Economic History (Vol. 56, No. 4, December 1996, pp. 789-808)

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