ISSN: (Online) 2321 -4155
ISSN: (Print) 2320 -7000

JOURNAL OF INDIAN RESEARCH
VOLUME : 3, ISSUE : 4, October-December, 2015 (ISSN No. : 2321-4155)
 
THE LIFE-CYCLE OF FIAT MONEY : AN INSIGHT INTO ITS HISTORY AND EVOLUTION
Farah Yassen Durani
 
ABSTRACT
The paper aims at providing a complete history of fiat money and its time line of evolution in practice. The paper also explores how paper money found its first use and a repeated trajectory that it followed in every period, place and authority. Paper money is basically fiat money with no intrinsic worth unlike metallic currencies. Fiat money has attained a unique status in our contemporary world. All governments issue it, and all businesses, organisations and individuals rely upon it. Mandated by law, fiat money is generally accepted as a convenient mode of exchange. Since fiat money is devoid of any intrinsic value, its value is based on the government fiat. The future exchange remains vaguely secured by an empty promise. The historical evidences discussed in the paper show how societies shunned the paper money experiment either by voluntarily returning to commodity money, or succumbing to the inflationary meltdoen of money with ill repurcussions on economy and society.The paper helps understand the context of the current debate on geoeconomics of finance and currency crisis.
 
KEYWORD
Assignats, Bank Ducats, bu, Chiao-tzu ,Chin Empire, Continental currency, credit, depreciation, Fiat money, fei-ch’ien, Great Depression, hard money, Hui-tzu, hyperimflation, mon, national paper currency of sen and yen notes, oban, paper money, shu, worthless national currency.
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