08/05/2026
🏦 How did 14th-century China keep paper money afloat without gold or silver backing?
That was the question at the heart of Professor Kuroda Akinobu’s recent distinguished lecture at IAS. His answer? Institutional "note circuits." After the Yuan dynasty abolished note exchange in 1309, the state required salt vouchers to be bought exclusively with new, "clean" notes, creating continuous demand and a stratified system where fresh notes traded at a premium. This structure kept inflation at bay for over four decades. 📜
The Ming dynasty, by contrast, lacked such renewal mechanisms, and their paper currency collapsed. The takeaway? In pre-banking economies, credibility doesn’t come from trust alone, but from well-designed circulation circuits. A huge thank you to Professor Wang Di for moderating, and to Professor Lin Shaoyang for insightful commentary.
Inspiring cross-disciplinary dialogue between history, economics, and the social sciences! 👏