Mind and Monetary Arrangements : A Method to Assess Monetary Heuristics in Historical Time

• In order to theoretically analyze, from the perspective of new monetary economics and social learning, the evolution of monetary arrangements with functional separation of money, this paper develops a method to study this phenomenon in the history of monetary arrangements of the North and Baltic Seas region, from the Hanseatic League onwards. The aim is to do historical economics, analyzing history from the perspective of the economic theorist, while the approach is topic-oriented rather than discipline-oriented, involving economics, history, and cognitive science. The focus will be on the cognitive aspect of money as social institution. This implies multiple methods. The evolution of units of account and media of exchange are adaptive responses by human minds. The focus will be on the heuristics of long-distance traders in the Baltic and North Seas region, expressed in the form of units of account and media of exchange they used and their success in the contemporary trading environments. Lessons for monetary separation with an abstract unit of account compared with one based on a commodity bundle will be developed. This involves the identification of the unit of account in which contracts and calculations were made and what media of exchange were used to make the payments. From a cognitive perspective, the medium of account provides a script that translates the unit of account into a particular worth. When the value of the underlying commodity bundle changes from the original worth, market agents observe a script deviation of that bundle, attributing thatto changes in the commodity space, and adjust the bundle accordingly. This method will be developed to be able to study four historical cases: Hanseatic monetary arrangements, seventeenth century banking, the gold standard and the unification of monetary functionsand nineteenth century monetary unions,and interwar monetary fragmentation.

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Keyword

emergent money

liquidity

monetary arrangements

value of money

social learning

monetary history

North and Baltic Seas region

Politik, ekonomi och samhällets organisering

Politics, Economy and the Organization of Society

Östersjö- och Östeuropaforskning

Baltic and East European studies

Publication and Content Type

vet (subject category)

kon (subject category)