In this paper, the problem of why low-purchasing power silver coins depreciated relative to high-purchasing power gold coins is examined. The standard explanation by Sargent and Velde is refuted. It is argued that the relative stability of gold was due to the demand from consumers able to detect...

By analysing a newly compiled database of exchange rates, this paper finds that Central European financial integration advanced in a cyclical fashion over the fifteenth century. The cycles were associated with changes in the money supply. Long-distance financial integration progressed in...