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Money Supply in the American Colonies

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The New Palgrave Dictionary of Economics


The British colonies in North America experimented with legislature-issued paper monies to supplement their specie monies which were in chronic short supply. These experiments were designed to produce inside monies that, unlike specie monies, could not profitably be exported. The nature of British regulation, while leaving room for some variation, constrained the colonies to issuing fiat currencies that were typically tied to paying the future taxes and other dues levied by the issuing colonies. After some early failures, most of these experiments performed well over the quarter century before the Revolution as revealed by the presence of long-run price stability.

This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume

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Grubb, F. (2008). Money Supply in the American Colonies. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London.

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  • Publisher Name: Palgrave Macmillan, London

  • Online ISBN: 978-1-349-95121-5

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