Observations on the Composition of Colonial Pennsylvania's Money Supply

Abstract:     
Although ingenious, Farley Grubb's (2004) recent money supply estimates for colonial Pennsylvania are too inaccurate to be of use to scholars. "Pounds" in runaway advertisements do not invariably refer to Pennsylvania's bills of credit, as Grubb asserts, but to her unit of account money. Similarly, ads promising "dollars" cannot be taken to refer to silver coins. Finally, bills of credit readily often passed current across the Middle Colonies, rendering any attempt to estimate the money supply at the colony-level highly problematic. Spot estimates of the money supply, some from archival records and some using methodologies that Grubb himself espouses elsewhere, vary widely from Grubb's time series.

Number of Pages in PDF File: 52

Keywords: monetary history, Pennsylvania, medium of exchange, unit of account

JEL Classification: N11, N21, N41, E59

working papers series