NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

A New Approach to Solving the Colonial Monetary Puzzle: Evidence from New Jersey, 1709-1775

Farley Grubb

NBER Working Paper No. 19903
Issued in February 2014
NBER Program(s):   DAE   ME

The market value of colonial New Jersey’s paper money is decomposed into its real asset present value and its liquidity premium. Its real asset present value accounted for over 80 percent, whereas its value as money per se accounted for under 20, percent of its market value. Colonial paper money was not a fiat currency. Its liquidity premium was driven by the quantity of paper money in circulation and the method of injection. The quantity theory of money performs poorly when using prices and exchange rates, but performs well when using real asset present values, to measure paper money’s expected value.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

This paper was revised on September 15, 2014

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19903

Users who downloaded this paper also downloaded these:
Gordon w19895 The Demise of U.S. Economic Growth: Restatement, Rebuttal, and Reflections
Scott Morton Consumer Benefit from Use of the Internet
Hayashi and Koeda w19938 Exiting from QE
Gustman and Steinmeier w19902 The Role of Health in Retirement
Heathcote, Storesletten, and Violante w19899 Optimal Tax Progressivity: An Analytical Framework
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us