The dual currency system of Renaissance Europe

Abstract

The monetary system of late medieval and early modern Europe has been commonly described as irrational, in the light of later commodity money standards. In particular, the alterations in the legal value and/or in the metal content of most coins throughout this period have been regarded as a source of disorder and as a product of ignorance and abuse. This article suggests that the whole system, and its apparently awkward articulations, may have been deliberately designed to ensure complementarity between domestic and foreign trade. From this perspective, monetary alterations appear as the levers of a peculiar form of monetary policy, with an extra degree of freedom compared to more modern instruments, and equally open to being managed or mismanaged.

Tensions in the triangle: monetary plurality between institutional integration, competition and complementarity

“…Historically, theoretically and even doctrinally, in an increasing number of works, what appears clearly besides competition is indeed the idea of complementarity. Fantacci (2005Fantacci ( , 2008 and Kuroda (2008aKuroda ( , 2008b developed this point from historical analyses and case studies, in Europe as well as in Asia, providing insights into what could be a theoretical approach to complementarity. Moreover, from a theoretical and doctrinal viewpoint, much has been published since the 1990s with respect to the spread of socalled community and complementary currencies.…”

Money endogeneity before central banking: perspectives from monetary history

“…In the case of small coins, this happened through debasement (reducing the metal content of a particular coin); for large coins, through enhancement, or 'crying up' the money (that is, increasing the nominal value, in units of account, of a particular coin). 15 In his work on the 'dual currency system' of Renaissance Europe, Fantacci (2008) has referred to debasement and enhancement as 'two levers of monetary policy' that allowed the supply of money to adapt to growing demand in an era of recurrent shortages of precious metal. The penny coin was the basis of the 'current money of account' in local markets within Italy.…”

“…Certainly the extrinsic value was predominant in cases where the metallic content of a coin was worn away through use, but it was still accepted at its full face value. Yet, according to Fantacci's (2008) 'dual currency' interpretation, the intrinsic value of coin was important in the international circulation of goods and money. Merchants involved in international trade received payments in a variety of local monies of account that had to be converted to some uniform measure, a consideration missing from Bell's (1998) single-state perspective.…”

Unpacking monetary complementarity and competition: a conceptual framework: Table 1.

“…Historically, theoretically and even doctrinally, in an increasing number of works, what appears clearly besides competition is indeed the idea of complementarity. Fantacci (2005Fantacci ( , 2008 and Kuroda (2008aKuroda ( , 2008b developed this point from historical analyses and case studies, in Europe as well as in Asia, providing insights into what could be a theoretical approach to complementarity. Moreover, from a theoretical and doctrinal viewpoint, much has been published since the 1990s with respect to the spread of socalled community and complementary currencies (CCCs).…”