The Big Problem of Large Bills: The Bank of Amsterdam and the Origins of Central Banking

Quinn, Stephen; Roberds, William

doi:10.2139/ssrn.814004

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The Big Problem of Large Bills: The Bank of Amsterdam and the Origins of Central Banking

FRB Atlanta Working Paper No. 2005-16

56 Pages Posted: 11 Oct 2005 Last revised: 23 Feb 2015

See all articles by Stephen Quinn

Stephen Quinn

Texas Christian University - Department of Economics

William Roberds

Federal Reserve Bank of Atlanta

Date Written: August 2005

Abstract

This paper outlines a model of the first true central bank, the Bank of Amsterdam, founded in 1609. Employing a variant of the Freeman (1996) model of money and payments, we first analyze the problematic monetary situation in the Netherlands prior to the founding of the Bank. We then use the model to describe how the Bank could remedy this situation by creating a stable medium for the settlement of commercial obligations.

Keywords: money, central banks, coinage, debasement

JEL Classification: E42, E52, N13

Suggested Citation: Suggested Citation

Quinn, Stephen and Roberds, William, The Big Problem of Large Bills: The Bank of Amsterdam and the Origins of Central Banking (August 2005). FRB Atlanta Working Paper No. 2005-16, Available at SSRN: https://ssrn.com/abstract=814004 or http://dx.doi.org/10.2139/ssrn.814004