Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25179
Authors: 
Volckart, Oliver
Year of Publication: 
2007
Series/Report no.: 
SFB 649 discussion paper 2007,007
Abstract: 
This paper examines the questions of whether and how feudal rulers were able to credibly commit to preserving monetary stability, and of which consequences their decisions had for the efficiency of financial markets. The study reveals that princes were usually only able to commit to issuing a stable coinage in gold, but not in silver. As for silver currencies, the hypothesis is that transferring the right of coinage to an autonomous city was the functional equivalent to establishing an independent central bank. An analysis of market performance indicates that financial markets between cities that were autonomous with regard to their monetary policies were significantly better integrated and more efficient than markets between cities whose currencies were supplied by a feudal ruler.
Subjects: 
Financial markets
integration
monetary policy
Middle Ages
JEL: 
G15
N13
N23
N43
Document Type: 
Working Paper

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