Did taxes, decrees or credibility drive money? Early nineteenth century Finland from a Chartalist perspective

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Title: Did taxes, decrees or credibility drive money? Early nineteenth century Finland from a Chartalist perspective
Author: Kauko, Karlo
Series: Scandinavian Economic History Review
Series volume: 66
Series number: 1; January ; 2018
Year of publication: 2018
Publication date: 21.9.2017
DOI: http://dx.doi.org/10.1080/03585522.2017.1375427
Page range: 73-90
Subject (yso): raha; valuutta; taloushistoria
Keywords: Suomi
JEL: B59; E42; E58; N13; N23; N43
Other keywords: Chartalism; money; currency; Finland
Abstract: Chartalist theories assume the government determines the currency used by the public. Finland’s experience following the Russo-Swedish war in 1808–1809 would seem to contradict the chartalist view. Having become a Grand Duchy under Russia, the Finnish Government sought to replace Swedish riksdalers in circulation with roubles. However, due to a resilient trade surplus with Sweden and the resulting flood of Swedish money into Finland, bans on the riksdaler were largely ineffective. Taxation proved a particularly clumsy tool for leveraging the switch to roubles. Taxpayers almost forced the government to accept payments in a foreign currency. Even the government had to use Swedish money. Issuing roubles was of limited use. As a result, the rouble failed to establish itself as Finland’s main currency until the introduction of a silver standard in 1840–1842.


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