The Case of Colonial New Jersey’s Paper Money: The Redemption Theory's Resurrection or Its Death Rattle

61 Pages Posted: 25 Apr 2017 Last revised: 27 Jan 2018

See all articles by Ronald W. Michener

Ronald W. Michener

University of Virginia - Department of Economics

Date Written: January 12, 2018

Abstract

Farley Grubb has recently published a series of papers addressing the monetary and financial history of colonial New Jersey. These papers purport that the best way to explain the value of colonial currencies in general, and New Jersey’s colonial currency in particular, is to consider them discount bonds. Grubb’s work revises and restates the redemption theory championed by other economists before him. This paper argues that there is no historical, theoretical, or empirical basis for the claim and that Grubb’s work highlights the inescapable shortcomings of redemption theories.

Keywords: colonial, New Jersey, currency, bills of credit, redemption theory, backing theory, money, monetary history

JEL Classification: N11, N21, N41, E59

Suggested Citation

Michener, Ronald W., The Case of Colonial New Jersey’s Paper Money: The Redemption Theory's Resurrection or Its Death Rattle (January 12, 2018). Available at SSRN: https://ssrn.com/abstract=2957768 or http://dx.doi.org/10.2139/ssrn.2957768

Ronald W. Michener (Contact Author)

University of Virginia - Department of Economics ( email )

P.O. Box 400182
Charlottesville, VA 22904-4182
United States

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