A1 Journal article (refereed)
Multi-currency regime and markets in early nineteenth-century Finland (2020)

Voutilainen, M., Turunen, R., & Ojala, J. (2020). Multi-currency regime and markets in early nineteenth-century Finland. Financial History Review, 27(1), 115-138. https://doi.org/10.1017/S0968565019000210

JYU authors or editors

Publication details

All authors or editors: Voutilainen, Miikka; Turunen, Riina; Ojala, Jari

Journal or series: Financial History Review

ISSN: 0968-5650

eISSN: 1474-0052

Publication year: 2020

Volume: 27

Issue number: 1

Pages range: 115-138

Publisher: Cambridge University Press

Publication country: United Kingdom

Publication language: English

DOI: https://doi.org/10.1017/S0968565019000210

Publication open access: Openly available

Publication channel open access: Partially open access channel

Publication is parallel published (JYX): https://jyx.jyu.fi/handle/123456789/78229


Pre-industrial money supply typically consisted of multiple, often foreign currencies. Standard economic theory implies that this entails welfare loss due to transaction costs imposed by currency exchange. Through a study of novel data on Finnish nineteenth-century parish-level currency conditions, we show that individual currencies had principal areas of circulation, with extensive co-circulation restricted to the boundary regions in between. We show that trade networks, defined here through the regional co-movement of grain prices, proved crucial in determining the currency used. Market institutions and standard price mechanisms had an apparent role in the spread of different currencies and in determining the dominant currency in a given region. Our findings provide a caveat for the widely held assumption that associates multi-currency systems with negative trade externalities.

Keywords: economic history; pre-industrial society; currency policy; currency; regional economy; commerce

Free keywords: multi-currency regime; market integration; Finland; nineteenth century

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Related projects

Ministry reporting: Yes

Reporting Year: 2020

JUFO rating: 1

Last updated on 2022-17-06 at 11:44