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The Romans were doing quantitative easing, or printing money, long before there were even printing presses. They did it by continually reducing the amount of silver in their coins so they could mint more of them. This was an easy way to pay the army. But the inflation it caused was a serious problem. This probably contributed significantly to the fall of the empire. I hope we aren't repeating past mistakes.I don't intend to make a habit of pimping my posts on here, but if you are interested there are more details on my blog.http://historybooksreview.blogspot.com/2010/11/quantitative-easing-roman-way.html
I heard that one of the most important reasons Caesar was assassinated was because he vowed to put an end to the constant inflation of their currency, and many aristocrats were dissatisfied with this.Nice article btw.
The Romans were not the only people in antiquity to debase their coinage to increase the money supply. The French and English did it during the middle ages as well, it also happened in 19th cnetury America. Where do you think the phrase “don't take any wooden nickels” came from?
The Romans were not the only people in antiquity to debase their coinage to increase the money supply. The French and English did it during the middle ages as well, it also happened in 19th cnetury America. Where do you think the phrase "don't take any wooden nickels" came from?
Absolutely. I suspect that debasing the coinage was one of those ideas that occurred about 10 minutes after the original idea of coins.
You are probably right. What better way to increase wealth than to make money worth less while retaining its face value?
I heard that one of the most important reasons Caesar was assassinated was because he vowed to put an end to the constant inflation of their currency, and many aristocrats were dissatisfied with this.Nice article btw.
The Romans were doing quantitative easing, or printing money, long before there were even printing presses. They did it by continually reducing the amount of silver in their coins so they could mint more of them. This was an easy way to pay the army. But the inflation it caused was a serious problem. This probably contributed significantly to the fall of the empire. I hope we aren't repeating past mistakes.
This is interesting, but would it really have been something they did at the time of Julius Caesar when Rome was still expanding and had access to additional precious metals? I could see it being a possibility after Trajan when Rome's territory peaked.Also - and this might be more of a technical economic question - if you reduce the amount of a metal in a coin, you are also reducing its mass and weight. So even if two coins look the same, if one is lighter it is inherently worth less. Technically, is that considered inflation? I realize it would be inflation with paper currency because the paper itself does not have an inherent value, but this is not the case with coins made of precious metals.
Coinage was debased by reducing the amount of precious metal in a particular denomination while it retained its face value. The typical way to do it was to substitute a base metal such as tin much like they do with Pennies today. This could only be done up to a point though or the coinage was so debased that people would not accept it. The practice is one of the reasons you so often hear of people biting gold coins to verify their authenticity, if the tin content is too high then the coin is hard and will not take an impression of your teeth. I saw some Roman coins in Italy last year that had been debased and minted with teeth impressions already in them. 😀
So basically the inflation would occur through diluting the coins so that they retained the same weight and size. Sneaky. At least back then they probably didn't have an easy way of separating the metals, so once dilution was done it was permanent.
There was a constant problem in antiquity and through to the 19th century whereby people would melt precious metal coinage and sell it on the opne market value because oftne the metal was worth more by weight than by face value. Their is also the issue of coinage being melted and worked into objects d'art with more value.
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