The Utility of a Common Coinage: Currency Unions and Financial Market Integration in Late Medieval Central Europe

62 Pages Posted: 4 Oct 2010

See all articles by Lars Boerner

Lars Boerner

London School of Economics & Political Science (LSE) - Department of Economic History

Oliver Volckart

Humboldt University of Berlin - School of Business and Economics

Date Written: September 15, 2010

Abstract

This paper employs a new method and dataset to estimate the effect of currency unions on the integration of financial markets in late medieval Central Europe. The analysis reveals that membership in a union was significantly correlated with well-integrated markets. We also examine whether currency unions were endogenous. Our results indicate that where unions were established, markets had been significantly better integrated already in the preceeding period. In addition, we show that currency unions created by autonomous merchant towns were better integrated than unions implemented by territorial rulers. The overall implication is that monetary diversity was a corollary of weakly integrated markets in late medieval Central Europe.

Keywords: Currency Unions, Financial Market Integration, Middle Ages

JEL Classification: F33, G15, N23

Suggested Citation

Boerner, Lars and Volckart, Oliver, The Utility of a Common Coinage: Currency Unions and Financial Market Integration in Late Medieval Central Europe (September 15, 2010). Explorations in Economic History, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1686685

Lars Boerner (Contact Author)

London School of Economics & Political Science (LSE) - Department of Economic History ( email )

Houghton Street
London WC2A 2AE
United Kingdom

HOME PAGE: http://sites.google.com/site/larsboerner/

Oliver Volckart

Humboldt University of Berlin - School of Business and Economics ( email )

Spandauer Str. 1
Berlin, D-10099
Germany

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