All posts in category Economic History

Is rationality the new stupidity?

On Twitter, I come across dozens of different bad analyzes, especially about economics. This is just one of them: You might think it’s stupid for people to stockpile things like gas. And, of course, you can also share it and laugh. However, just because you think something is stupid doesn’t make it stupid. The real […]

The Quantity Theory of Money

In the previous post, we entered the fiat money system. Now we will examine the quantity theory of money. The fiat currency’s supply and demand are different from the commodity money model(silver or gold) we examined earlier. There are two reasons for this: In the fiat money system, the government has unlimited control over the […]

It’s all about appearances

In the previous post, I discussed the gold standard’s phase-out. When we used commodity money, we developed a medium of account (MoA) valid for both gold and cash. This could only occur if one was fixed to the other. Silver was phased out in the nineteenth century, and gold was phased out in 1968, following […]

The Long Phase-Out of Gold

In this and the next few posts, I will examine how money determines the price level. It seems quite appropriate to start with the silver standard first. Let’s start by assuming that our unit of account is a pound of silver or “PS” for short. We can define money using various criteria, including the medium […]