A Monetary History of China, free online

I recently found out that the English translation of Peng Xinwei’s monumental work A Monetary History of China is now available free online. The work covers Chinese monetary history from ancient times through the end of the monarchy in 1911. Peng Xinwei was a scholar turned banker who was one of the victims of Mao Zedong’s Cultural Revolution. The Chinese version of the book is from 1965. Edward Kaplan translated the book into English, an impressive feat of scholarship in its own right, and had it published in two volumes in 1994. I wrote a review of the book here.

There have of course been other notable books on Chinese monetary history since. Those that have caught my attention include Richard von Glahn’s Fountain of Fortune: Money and Monetary Policy in China, 1000-1700 and Jin Xu’s recently translated Empire of Silver: A New Monetary History of China. I have not seen a good history of the last century-plus of the Chinese monetary system, though there are books on subperiods and topics. For mainland Chinese scholars, the topic is fraught with difficulty, because under the first few decades of Communist rule, the monetary system was among the institutions that hindered China from experiencing the rapid and widespread economic growth enjoyed by Hong Kong, Singapore, and Taiwan.

50,000 More Dates

No, not at Match.com, but at Historical Financial Statistics. Our apparently unique calendar spreadsheet (accompanied by a detailed documentation file) shows dates from 1500 to the present according to ten calendars: Julian day number, Julian, Gregorian (the standard calendar for most of the world today), traditional Chinese, Ethiopian, French Republican, Hebrew, Islamic, Iranian, and Ottoman.

There are, however, some gaps. One that has just been filled concerns Chinese calendar dates during the Ming Dynasty (1341-1644). Keith Hazelton, an information technology guru, used his expertise to calculate the correspondence of dates between the Chinese calendar and Western calendars in an old research paper I only recently came across. He has kindly allowed Historical Financial Statistics to use his data.

Some other gaps remain. The Iranian (hijri) calendar was reformed in 1925, and mechanically extending the current rules backwards does not always give correct dates. The Hebrew calendar is complex, and I could only readily find dates in spreadsheet format since since the founding of the State of Israel. The Buddhist calendar is not shown at all in the spreadsheet because I could not readily find easily usable information on its correspondence to Western calendars. I would appreciate any information readers can offer to fill these gaps or to include other calendars that have been important in some part of the world over the last 500 years.

Dollarization in Ecuador Turns 15 Years Old

They said it couldn’t be done, then that it wouldn’t be done, and finally that it shouldn’t be done. It was done and they foresaw trouble. “It” was dollarization in Ecuador, which is now 15 years old. Unlike almost every other country in South America, Ecuador had never suffered a hyperinflation. In late 1999, though, it was on the brink of one, as a low price for oil (the country’s leading export), a banking crisis, and a central bank seemingly unable to get a grip on the situation created great distrust of the local currency, the sucre. Merchants started to post prices in dollars and people began to spend their sucres as fast as they could. In desperation, president Jamil Mahuad announced that Ecuador would eliminate the sucre and use the dollar as its official currency. Some Ecuadorian economists and business leaders had been making the case for dollarization for months, but the announcement was a surprise even to them.

Dollarization began to work immediately, despite much skepticism from international observers (quoted in this article by Steve Hanke, pp. 134-5). As it happened, I visited Ecuador just after dollarization was announced. Interest rates started dropping and the feeling of panic started receding immediately. There was worry about whether the economic situation was so bad that dollarization would make little difference over a longer period, but now it can be stated with confidence that dollarization did make a difference. By my calculations, it is the longest-lasting monetary policy Ecuador has had since the 19th century. It has persisted through an attempted coup, four peaceful changes of president, and a global financial crisis. Now the price of oil is again low, and it remains to be seen how Ecuador’s economy will adjust. But whether we are thinking about something as grandiose as a “new Bretton Woods” or as comparatively modest as monetary reform in one midsize country, let us not dismiss an idea simply because we do not think it is politically feasible at the moment. As the saying goes, a week is a long time in politics; certainly it was 15 years ago  in Ecuador.

Those who understand Spanish may be interested in an Ecuadorian site with material from a recent conference looking back at 15 years of dollarization.

Bitcoin: The Real Virtual Currency?

Bitcoin is an extraordinary development at the nexus of software engineering and monetary theory. Due to the complexity and multidimensional nature of the topic, CFS hosted a roundtable to delve into issues covering technology, monetary and investment, as well as legal and regulatory.

We thank Jennifer Shasky Calvery (Financial Crimes Enforcement Network), Kathleen Moriarty and Evan Greebel (Katten Muchin Rosenman), Barry Silbert (SecondMarket), and Cameron Winklevoss (Winklevoss Capital Management) for sharing their knowledge and speaking at the event as well as roundtable participants who made for a lively and informative discussion.

For background, we assembled and digested a wide range of papers, facilitating the creation of a new section in the CFS policy library dedicated to virtual currencies – but largely focused on Bitcoin.

The CFS virtual currency library is at: