How Amsterdam Got Fiat Money

109 Pages Posted: 23 Mar 2015

See all articles by Stephen Quinn

Stephen Quinn

Texas Christian University - Department of Economics

William Roberds

Federal Reserve Bank of Atlanta

Date Written: December 2010

Abstract

We investigate a fiat money system introduced by the Bank of Amsterdam in 1683. Using data from the Amsterdam Municipal Archives, we partially reconstruct changes in the bank's balance sheet from 1666 through 1702. Our calculations show that the Bank of Amsterdam, founded in 1609, was engaged in two archetypal central bank activities — lending and open market operations — both before and after its adoption of a fiat standard. After 1683, the bank was able to conduct more regular and aggressive policy interventions, from a virtually nonexistent capital base. The bank's successful experimentation with a fiat standard foreshadows later developments in the history of central banking.

Keywords: Bank of Amsterdam, fiat money, commodity money, monetary policy, credit policy

JEL Classification: E42, E58, N13

Suggested Citation

Quinn, Stephen and Roberds, William, How Amsterdam Got Fiat Money (December 2010). FRB Atlanta Working Paper No. 2010-17, Available at SSRN: https://ssrn.com/abstract=2481165 or http://dx.doi.org/10.2139/ssrn.2481165

Stephen Quinn

Texas Christian University - Department of Economics ( email )

Fort Worth, TX 76129
United States

William Roberds (Contact Author)

Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States
404-498-8970 (Phone)
404-498-8956 (Fax)

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