The rise and fall of paper money in Yuan China, 1260–1368

Hanhui Guan, Nuno Palma, Meng Wu

Research output: Contribution to journalArticlepeer-review

Abstract

Following the Mongol invasion of China, the Yuan (1260–1368) dynasty was the first political regime in history able to deploy paper money as the sole legal tender. Drawing on a new dataset on money issues, imperial grants, and prices, we show that a silver standard initially consolidated the Chinese currency market. However, persistent fiscal pressures eventually compelled rulers to ease the monetary standard, and a fiat standard was adopted, leading to inflation levels which doubled the price level in less than a decade. We show that military pressure generated fiscal demands which led to over-issuance, and we reject the role of excessive imperial grants in triggering the over-issue of money.
Original languageEnglish
JournalEconomic History Review
Publication statusPublished - 8 Jan 2024

Keywords

  • Paper money
  • silver standard
  • fiat money
  • Yuan China

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