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Colonial American Paper Money and the Quantity Theory of Money: An Extension
- Social Science History
- Cambridge University Press
- Volume 43, Number 1, Spring 2019
- pp. 185-207
- Article
- Additional Information
Abstract:
The quantity theory of money is applied to the paper money regimes of seven of the nine British North American colonies south of New England. Individual colonies, and regional groupings of contiguous colonies treated as one monetary unit, are tested. Little to no statistical relationship, and little to no magnitude of influence, between the quantities of paper money in circulation and prices are found. The quantity theory of money does not explain the value and performance of colonial paper monies well. This is a general and widespread result, and not a rare and isolated phenomenon.