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Paper Money Inflation, Prices, Gresham’s Law and Exchange Rates in Ming China



Bernholz, P. Paper Money Inflation, Prices, Gresham’s Law and Exchange Rates in Ming China. Credit and Capital Markets – Kredit und Kapital, 30(1), 35-51.
Bernholz, Peter "Paper Money Inflation, Prices, Gresham’s Law and Exchange Rates in Ming China" Credit and Capital Markets – Kredit und Kapital 30.1, 1997, 35-51.
Bernholz, Peter (1997): Paper Money Inflation, Prices, Gresham’s Law and Exchange Rates in Ming China, in: Credit and Capital Markets – Kredit und Kapital, vol. 30, iss. 1, 35-51, [online]


Paper Money Inflation, Prices, Gresham’s Law and Exchange Rates in Ming China

Bernholz, Peter

Credit and Capital Markets – Kredit und Kapital, Vol. 30 (1997), Iss. 1 : pp. 35–51

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Peter Bernholz, Basel


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Paper Money Inflation, Prices, Gresham’s Law and Exchange Rates in Ming China

In the present article the Ming paper money inflation of 1368 - 1448 is analyzed with the intention to test whether the theory of a complete inflationary cycle is applicable not only to Western historical cases but also to this much earlier and culturally different historical episode. A complete inflationary cycle begins with the introduction of paper money to finance a budget deficit and its use by the public besides specie. It later drives the specie out of circulation (Gresham’s law). After that inflation begins and accelerates. Specie money returns and substitutes the paper money, which finally vanishes from circulation. It is shown that these and other qualitative characteristics were present during the Ming inflation