Currency Hierarchy — Eric Tymoigne

In Stabilizing and Unstable Economy, Minsky noted that “[a]n economy has a number of different types of money: everyone can create money; the problem is to get it accepted” (p. 228). While governments and banks usually get the spotlight, tens of thousands of monetary instruments have been issued by localities, ecclesiastic domains, local seigneurs, taverns and other private agents in many periods of monetary history, worldwide, up to the present [see Burn (1853); von Glahn (1996); Fletcher (2003); Blanc (2017)]. All these instruments are part of a “hierarchy of money” (Bell, 2001), “debt pyramid” (Olivecrona, 1957), “pyramid of credit” (Murad, 1954), or “scale of credit” (Wilson, 1811); a concept used to categorize the variety of monetary instruments available in a given area common to all of them, and the extent of the operation of a payment system and its integration within other, usually broader, payment systems. While the given common area is often the domestic economy, the international scale can also be considered (see de Conti et al., 2013; Palludeto and Abouchedid, 2016).

Monetary Policy Institute Blog #148

Currency Hierarchy
Eric Tymoigne, MMT economist
Associate Professor of Economics at Lewis & Clark College
Research Associate at the Levy Economics Institute of Bard College